South Korea’s Government Switches To A Softer Stand On Cryptocurrency Ban

If you’re a crypto investor currently residing in South Korea, the past few days must have been quite a turmoil. Especially after the senior minister in the federal government went on record saying that an outright ban approach on cryptocurrency trading was still very much a “live option.”

Expectedly, the minister’s comment created panic among a sizeable chunk of the investor community who then went on selling off their crypto holdings in anticipation of an imminent crackdown. However, now it turns it out that the panic was probably more of an overreaction as the government has since virtually ruled out an outright ban in the immediate future.

The South Korean Office for Government Policy Coordination issued a statement on Monday hinting that the crackdown on crypto assets won’t necessarily come imminently.

“The proposed shutdown of exchanges that the justice minister recently mentioned is one of the measures suggested by the justice ministry to curb speculation. A governmentwide decision will be made in the future after sufficient consultation and coordination of opinions,” the Government Policy Coordination office said in a statement.

Cryptocurrency ban in South Korea won’t be easy

It is hard to rule out the possibility that the government came up with the above clarification only after coming in terms with the fact that South Korea’s investor community won’t take any such ban lying down. According to Reuters, the online uprising against the purported ban on crypto trading has already put President Moon Jae-in in a tight spot.

The pushback was inevitable. After all, as one of the early adopters of bitcoin and other crypto coins, South Korea has been and has contributed significantly to the rise of the crypto economy over the past decade. According to some estimates, the country currently accounts for nearly 20 percent of Bitcoin transactions worldwide.

Moreover, there’s a sizeable number of Koreans who have already invested a significant portion of their life savings in cryptocurrencies. This is partly due to the fact that the country’s uptight regulations have stripped the common citizen of any conventional high-yield investment option.

According to a recent survey by job portal Saramin, as much as 30 percent of salaried workers in South Korea have invested in at least one sort of crypto assets.

Notably, the panic over a potential crackdown in Korea is considered one of the prime factors that may have led Bitcoin prices to plummet right after hitting the $19,000 landmark last month.

Readers probably remember that the most popular cryptocurrency in the world lost over $1,000 of its value on Dec 28. It was the same day when the Korean government came up with a statement reminding investors that crypto coins cannot serve as an alternative to fiat currency. The same statement also urged investors to exercise caution as virtual currencies “could result in high losses due to excessive volatility.”

Featured image by Liza

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