South Korea begins path to Bitcoin legalisation

South Korea is the latest country to make moves for the legalisation of Bitcoin and other cryptocurrencies. The news comes on the back of two separate events which are sure to influence the shape of Bitcoin regulation in the East Asian state. Following the forward-thinking movements of its near-neighbours Japan and the Philippines, South Korea is seeing the need for regulation of the cryptocurrency field as it is an area whose use is spreading and its adaption as a means of payment is becoming more popular.

The first step in the move for regulation came on 3 July, when representative Park Yong-jin of the Democratic Party of Korea, the party currently in control of the Korean government, announced plans to revise the Electronic Financial Transactions Act. The proposals would see changes to the laws regarding income and corporate tax in a bid to cut out tax evasion related to cryptocurrencies and would also require the need for those trading in cryptocurrencies to meet regulations set out by the Financial Services Commission before being able to complete transactions with digital currencies. In his report, Park warned of the lack of “a state-led protection that guarantees digital currency’s value”, as well as the danger of a “digital currency bubble burst” that could severely damage the Korean economy.

The second event that is likely to influence South Korea’s Bitcoin policy was the recent hacking of South Korea’s largest bitcoin exchange. Bithumb, which is also the fourth-largest Bitcoin exchange in the world, was hacked to the tune of billions of South Korean won, though the exact figure is not known. The incident raises questions about the security of Bitcoin transactions in South Korea and is sure to lead to calls for increased regulation when it comes to bitcoin exchanges operating in the country.

These two events will surely see South Korea emerge as one of the friendliest nations when it comes to Bitcoin and other cryptocurrencies.

 

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