The South Korean government is considering adopting a joint regulatory approach to cryptocurrencies with Japan and China, in a move that would create the first regional harmonization of laws surrounding cryptocurrencies.
This week, financial regulators in South Korea have outlined plans that would see them cooperating with counterparts in Japan and China to shore up new regulations on cryptocurrency.
The concept is particularly notable in light of China’s restrictive approach to cryptocurrency regulation so far, and could spell a significant departure from the liberal, unregulated approach adopted by the South Korean authorities to date.
Despite a lack of any regulation covering cryptocurrencies in Korea, regulators have become increasingly vocal over the last couple of months, especially in light of strong price growth in cryptocurrency markets.
Initial regulation could be introduced as early as January 20, 2018, according to recent media reports, as the government and financial regulators in South Korea look to tighten up guidelines surrounding crypto markets.
But now, with plans afoot for closer cooperation throughout the region, the South Korean approach could be set to become altogether more restrictive.
According to reports in Korean media, representatives from the Financial Services Commission met with their counterparts from China and Japan over the last few weeks. Heralding the work, the Financial Services Commission chairman Choi Jong-ku labelled investment in cryptocurrency ‘irrational’.
In explaining the position of the South Korean government, Choi Jong-ku was unequivocal in his stance: “[A] fever of speculative investment in cryptocurrencies is ongoing … however, cryptocurrencies are unable to play a role as a means of payment.”
The news comes following an announcement that two other Korean regulators, the Financial Intelligence Unit and the Financial Supervisory Service, have embarked on investigations into six separate banks, as part of enforcement mechanisms to ensure banks are complying with new anti-money laundering requirements for those dealing in cryptocurrencies.
With South Korea now looking to adopt a more controlled approach to cryptocurrency markets, it remains to be seen whether the measures will have any impact on the rampant buyer sentiment that continues to grip the space.