South Korean Central Bank Decides to Regulate Bitcoin as a Commodity

South Korean Bitcoin Regulation:

 

The South Korean Bitcoin regulation is about to take place. This decision was talk as a result of the parliamentary audit of the Bank of Korea revealed that they have not done “enough” research on the digital currencies which includes Bitcoin and Ether. Bank of Korea (BOK) Governor Lee Joo-Yeol, told the  lawmakers of South Korea that the digital currency should not be considered as a currency; and promised to conduct more research on this topic.

The National Assembly of the Republic of Korea conducted a Parliamentary audit on Monday. During this hearing, the Bank’s governor had announced that Bitcoin will be regulated as a commodity, rather than a currency.

Furthermore Lee added and disagreed with Bank of International Settlements (BIS)’s definition of Bitcoin as money:

 “It is difficult to look at [virtual currencies] as money by [the definition] of Bank of International Settlements (BIS). Regulation (of virtual currencies) is appropriate because it is regarded as a commodity. It [cannot be] regulated at the level of a currency.”

Song Young-gil (Democratic Party lawmaker and member of the National Assembly’s Planning and Finance Committee) pointed on the “poor” state of research that has been done by Central Bank on the topic. Asiae News quoted him.

“Virtual currency and blockchains are important research subjects, if you neglect them, you can lose the future market,” Song asserted, adding that “the bank should do more research in the future.”

 

South Korea on ICOs:

 

In 2016, South Korean government created a digital currency task force to solve the issues involving cryptocurrencies. According to CNN’s report, participants in the research conducted by the task force "failed to agree on whether cryptocurrencies should be included in systems right now and how the systems work if they are included.”

According to South Korea’s financial regulator, the Financial Supervisory Service (FSS), ICOs increase the risk of fraud, so a ban will be implemented.

FSS vice chairman Kim Yong-Bum was quoted:

“We are worried about adverse effects such as increased risk of fraud, the ICO will be prohibited in all forms.” 

The aim of the ban is to protect investors from possible fraud. This move has led to worries of a campaign against the local digital currency trading market in the country that is similar to the crackdown recently launched by the Chinese government.
 

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