By David Drake
Despite banning initial coin offerings (ICOs) some months ago, South Korea seems to be re-positioning itself to become a major global player in the cryptocurrency industry. Other than lifting the ICO ban and rolling out strict cryptocurrency regulations, the Financial Services Commission (FSC) has stated that it is not opposed to cryptocurrencies as it plans to implement cross border crypto regulations agreed during the G20 summit.
Additionally, the Bank of Korea has said that cryptocurrency investments pose a small risk to South Korea’s financial market. As of December 2017, the cryptocurrency balance held in South Korea’s local banks stood at $1.79 billion, which is about 8% of the country’s brokerage houses total deposits.
Although the share of cryptocurrency balances in South Korean banks is small compared to other sectors, these decisions will likely have a significant effect on the global cryptocurrency market. According to Jess Davis, CEO of Uberstate, the significance of the decisions is an impending global blockchain acceptance as countries are putting their infrastructure in place.
He says, “The significance of Korea and outlying G20 countries support mean that there is impending acceptance of Blockchain as a technology and medium of exchange. Currently countries and banks are putting in place the global infrastructure to connect all countries on similar payment systems and find the highest and best uses for distributed immutable ledger technology.”
The growth witnessed in the cryptocurrency space has led to an emergence of innovative solutions on the blockchain. Some notable ICO projects include URAllowance with parent-children interaction solutions, BlockVest that utilizes smart contracts to facilitate digital asset management and IOU that provides customer satisfaction solutions to the e-commerce industry.
Other revolutionary ICO projects are precious metal trading platform AnthemGold, Bank52, a networking, collaborative and smart data banking platform and Bitque, a peer-to-peer exchange platform for digital currency traders.
A Paradigm Shift
Alex Karasulu, co-CEO and founder of OptDyn is of the opinion that there is a shift in the global cryptocurrency market from countries that resist crypto-friendly countries. He holds that countries that try to stop cryptocurrencies will only lose on cryptocurrency wealth.
He says, “South Korea’s directional pivot removes another brick in the wall. In fact, it removes several bricks because it demonstrates the futility, yet again, of governments resisting the global cryptocurrency tsunami. China, an economic juggernaut, demonstrated the severe repercussions of trying to stop that train in 2017, with cryptocurrency capital flight into progressive neighbors like South Korea and Singapore.”
“The domino effect has begun and we’ve seen it twice now with two large economies that overreacted and have corrected themselves to embrace cryptocurrency based banking, token distribution events, and exchanges. Otherwise the wealth simply seeps out of their institutions into those outside that are more cryptocurrency friendly,”he adds.
Similarly, Antonio Sainz, co-founder and CEO of Inclusivity wants other countries to follow South Korea’s decision as any contrary move will only see them miss the opportunity to lead the cryptocurrency market.
He says, “In the cryptocurrency market there are two positions: those who want to lead the market and not lose this opportunity and the fearful who seek protection via regulations and who can lose the train of innovation and the market. Let each country choose its position. Korea seems that they have chosen their way, I hope the others countries to choose the right train.”
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.