The South Korean cryptocurrency ban was unexpected as they have been a crypto powerhouse which oversees many activities in the space from huge investments and trading communities to big exchanges such as Bithumb has led to a rise in uncertainty around the crypto space. The government recently weighed in with new regulations which makes it a little difficult for the crypto community in South Korea carry out transactions. Some of the new regulations include; a temporal ICO ban, a ban imposed on minors and foreigners from trading and holding cryptocurrencies and a new regulation which gives traditional banks the sole rights to issue virtual bank accounts to customers of cryptocurrency exchanges.
What impact will the South Korean cryptocurrency ban have?
There is a lot of FUD (fear uncertainty and doubt) among crypto investors and traders following this South Koren cryptocurrency ban as this comes after China’s crackdown on cryptocurrencies. These two nations played a vital role in both the Asian and global crypto industry. What is now the faith of the industry?
Firstly, it should be noted these are just regulations some of which are temporal which aims at controlling and overseeing the activities of cryptocurrencies. The government wants full identification and also plans to impose a ban on minors and foreigners from trading cryptocurrencies so this should not be mistaken for a complete ban on all cryptocurrency related activities.
Also, no government wants to take a complete ban on cryptocurrencies as they fear on missing out. For that reason, the best they can do is regulate rather than put a complete ban on its activities.
Furthermore, the ICO ban in China which was one of the biggest players in the space didn’t have any significant impact on the entire industry. In fact, Bitcoin’s price kept moving onward after the ban. It will not be surprising to see the same thing repeats its self with the case of S.Korea as after the ban, the price of Ripple hit record highs and that of Ethereum and Litecoin keep increasing still.
Also, there is a reason why the crypto space is said to be decentralised, meaning no government regulation can stop it impact its survival. Remeber money even the USD is anything the people find as a valuable means of exchange. Even the USD and other fiat currencies are not the first forms of money and won’t be the last.
Furthermore, the ICO ban in China and South Korean cryptocurrency ban are only temporary and are likely to be dropped in the nearest future. ICO like any other any other fundraising strategy be it IPO or other forms of crowdfunding can be abused. These bans are just a temporal strategy to keep their citizens safe from such abuses while thinking on the best ways to regulate ICO’s.
Lastly, the idea that other countries will follow suit with similar bans is highly unrealistic given the fact that no country, especially in the west, would like to miss out or join in when others have reaped the benefit of first-mover advantage. We can expect to see regulations from time to time but a general crypto crackdown won’t happen.
What do you think about these regulations? Do you think there are even more reasons why they won’t be a general crypto ban from a government? Or do you think governments can successfully kill cryptocurrencies?
If so, please let us know what your thoughts are in the comment section below.