South Korea may ponder their own state-backed cryptocurrency as members from their well respected academic institutions are researching and suggesting their central bank implements their own fiat backed cryptocurrency. The researchers believe that this would help to bring much-needed improvements to their financial sector.
They are urging the Bank of Korea to look into the benefits of issuing digital tokens of the traditional currency via the use of the blockchain to be able to streamline aspects of the system and gain the additional improvements of saved costs, faster payments and greatly increased transparency. All of these aspects add up to paving a way for a potential renaissance in the field of finance.
One of the researchers noted that being able to incorporate this technology would help to improve the accounting records and help to have a preventative defense against attacks that occur in the cyberspace.
They have also gone on to note that the central bank of Korea is far behind in its progress in this cryptocurrency area and should take steps to accelerate its knowledge acquisition, awareness and eventual deployment of the crypto-based Korean won.
These academics are convinced that being able to have the central bank issue their version of a state-based cryptocurrency would allow for changing the industry of banking in their country.
South Korea is not the only one that has been looking into this as others have mentioned a potential move in the past as well, such as the United States, Israel, Russia, and China. China has already taken steps to test out the blockchain and has completed a successful trial.
This would not be a surprising move for the country, if it were to take place due to the fact that the private markets in the country have been involved, rather, heavily in the virtual currency ecosystem, the private market in South Korea could be considered as one of the most significant players on a global scale.
The Government and contemplation of regulation in crypto
The country has already said no to the launch of initial coin offerings in South Korea because they felt that there were a variety of issues that could arise if it were left to continue and develop and so, they have banned it. The government of the country has stayed rather neutral when it comes to regulation of cryptocurrencies in general but their financial regulator finally issued their statements within this month, stating that they do not intend to impose regulations at this time.
“All we can do is to warn people as we don’t see virtual currencies as actual types of currency, meaning that we cannot step up regulation for now.” Choe Heung-Sik, Governor of South Korea’s Financial Supervisory Service, stated in a press conference.
The South Korean regulator thinks that there isn’t any reason to as Bitcoin does not pose any threats and are not legal tender and don’t come close to being similar to fiat in the country as of yet. Governments are making their own decisions on how to label virtual currencies, looking at it as financial commodities or actual currencies that can compete with fiat.
“Though we are monitoring the practice of cryptocurrency trading, we don’t have plans right now to directly supervise exchanges,” Choe elaborated on the FSS’ stance on cryptocurrencies. “Supervision will come only after the legal recognition of digital tokens as a legitimate currency.” He added.
The FSS had devised a set of regulations last week that pertained to the trading of cryptocurrencies in the country. Although not as strict as the regulations that are generally associated with conventional currency, the set of rules included the requirement of banks to verify the identification of account holders when creating new virtual currency accounts for cryptocurrency trades.
Even so, just as other nations are doing, South Korea is devising ways to make sure that they do not miss out on their piece of the crypto pie and are making certain to bring home capital gains.Follow us on Social Media: