An emerging trend in 2018 is the global market anticipation regarding how South Korea will proceed with regulating digital currencies. For Canadian investors, the answer could be particularly impactful.On December 28th, 2017, Reuters reported South Korea’s intention to follow justice ministry recommendations in handling digital currency trade. New legislation would grant regulators the authority to shut down digital currency exchanges and ban anonymous trading accounts. The global market reacted to South Korea’s announcement with uncertainty, and price dips continued through to 2018. On January 11th, 2018, news broke that South Korea’s ‘ban’ on digital currency trading was in progress, citing Justice Minister, Park Sang-ki, whose statements caused a temporary 14% dip in bitcoin prices. Since then, however, South Korean government statements indicate that the ban will not go forward as advertised. “The cryptocurrency trading ban proposal introduced by Justice Minister Park Sang-ki was a suggestion made by the Justice Ministry on December 28 to bring speculation within the cryptocurrency market under control,” said officials. “The proposal will be discussed and changed by the task force participated by the Ministry of Strategy and Finance, [the] central bank, Fair Trade Commission, and other agencies.”Now, a petition against proposed digital currency regulation in South Korea has amassed over 200,000 signatures. This puts the petition over the threshold required to force a response from South Korea’s presidential residence, the ‘Blue House’.
It’s no secret that South Korea has been highly influential towards the value of digital currencies in the past. This is recently evident in the Justice Minister of South Korea’s statements causing observable panic within the market.South Korea’s influence finds its base in the volume of digital currency trades within the nation. Estimates put South Korea is the third-biggest bitcoin market in the world, making it a major contender. With that in mind, severe regulations in South Korea could have severe effects on the market. Further, strict regulations may cause panic within the global digital currency community. Given Canada’s generally positive stance towards blockchain and digital currency, the country faces potential issues if South Korea’s regulations are too strict.
Many outside of South Korea fear that the government’s potentially strict actions are a sign of things to come. With the sudden popularity of digital currencies, governments across the world have a unique situation that’s difficult to address uniformly.In Canada, this debate has taken many forms. Many Canadian investors and government officials alike advocate for regulation as a way to prevent scams and tax evasion. Conversely, Toronto city councillor, Norm Kelly, recently proposed allowing the government to accept digital currency as a way of paying taxes. It is not hard to imagine that governments across the globe are awaiting South Korea’s decision in the same way as ordinary enthusiasts. Regardless of what South Korea’s verdict may be, many around the world will feel its impact.Image credit: Wikimedia Commons
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