South Korea ponders future of cryptocurrencies
In case you were wondering why South Korea has been taking measures to rein in the far-reaching repercussions of cryptocurrencies, a new survey conducted by the Bank of Korea may have the answer for you.
For starters, the survey has estimated that individuals in their 20s and 30s are quite excited about the cryptocurrency newa wave and will gladly participate in it, despite the bank’s warnings that imprudent investment may only spell financial ruin.
However, instead of showing prescience, South Korea’s youths may be chasing wind. It is not necessarily the most affluent who want to invest in currencies. The study has revealed that low to mid-income earners have been the most enthusiatic about these assets, and more specifically- those earning below $18,600 a year tended to be the most dedicated investors.
This study has unpick an important question and address a potential problem in the future – the unwise spending of FIAT money on cryptocurrency, which offers no security and no way back of making a living. According to the data revealed by the Bank of Korea, estimated 1.14 million users have now joined crypto exchanges, a remarkable number and one that should easily put all regulators and watchdogs ill at ease.
The enthusiasm exhibited by South Korans is quite understandable insofar as the country has always been among the early adopters. However, given the fairly heady track record of currencies in Asia, it may be quite worth it to take a step back and reconsider before making any substantial investments in future.
Elsewhere in Asia, while the enthusiasm has been equal, governments have been hard hitting. This of course puts South Korea at a very sensitive point – does the govermet go all out on cryptocurrencies, much like China do, or do legislator sit down and think about a regulatory framework. But how do you regulate something that can travel around the world and back in mere seconds without being accountable elsewhere.
With this in mind, it may be time for legislators to sit down and have a clear think. For starters, it would not be necessary to police the whole crypto eco system. Instead, authorities may focus on several key apsects that are undermining the security of their citizens right now. For starters, they can:
- Introduce common financial practices, such as KYC and agree them with anti-money laundering laws;
- The authorities may request that all users that use cryptocurrencies also pay tax on them and additional revela their identity insteaad of hiding behind the murky unwritten laws of cryptocurrencies themselves;
- In addition, exchanges should be required to do more when it comes to tightening their own security lest they run into a new spate of unfortunate events as they had in the last few months.
Of course the whole situation is rather precarious. Thinking that you can honestly go ahead and invest FIAT currency into something that has no secure promise of any return, let alone heavy windfall, is unwise. People who engage in such trading also tend to be individuals who are investing money that they actually need to make a living as opposed to squandering some excessive, tucked-away cash. It is dangerous and this should not be the case.
Instead, South Korea should focus on coming up with ways to introduce its citizens to cryptocurrencies and teaching them awareness. While investment in crypto assets could be auspicious on occasion, it could have unexpected turn of events on other times. For this particular reason, the government should come up with an idea of what is acceptable and what isn’t.
The options are not as easy to pioneer. For instance, South Koreans are unruly when it comes to limiting their freedoms. More, a move from the government to take a bit at cryptocurrencies may be percieved as an attempt to stifle creativity, which is also not the wisest thing to do. With this in mind, the government has a challenge up ahead. While it is pondering and failing to decided, it is effectively perpetuating a mild crisis that may quickly topple into something more serious should a legislative framework failed to be established.
South Korea has long had experience being first at technology, however, the country has not really thought about how to deal with cryptocurrencies, which have not really been ‘a thing’ until recently. The surprising developments of the past years have gone widely under the radar of mainstream banking bodies and country governments, but it may be a time that national legislators take cryptocurrencies a bit more seriously.
South Korea has been often first. It is a good time to show the way for the rest of the world once again.