If a new amendment put forth in South Korea’s legislature is approved by the country’s president, the regulatory environment around cryptocurrencies in the Asian economic power will finally be clarified.
The cryptoeconomy turned its attention to the Korean National Assembly on March 5th, when the deliberative body passed a modification to South Korea’s main financial reporting act that would, if passed, enact formal recognition of domestic crypto activities.
To date, cryptocurrencies and crypto businesses have generally existed on the edge of South Korea’s legal system, with only the largest enterprises — e.g. large exchanges like Bithumb and Upbit — being suited to tread the uncertainty.
Alas, if South Korea’s president does approve the new crypto rules, the regulatory framework will be firm but clearly traversable for businesses of all sizes. Anti-money laundering (AML) and know-your-customer (KYC) controls lie at the heart of the amendment, meaning its approval would make South Korea among the first nations in the world to decisively bring crypto into the fold of its legal system.
Zooming out, the new legislation is not only a general legitimization boon for the crypto sector, but it’s also surely being scrutinized by other lawmakers from across the international stage. Accordingly, the amendment could inspire more legislators to follow suit in their own spheres of influence.
Comes on the Heels of Big India News
It’s been a good week for pro-crypto regulatory news.
One day prior to South Korea’s amendment development, the Supreme Court of India struck down as unconstitutional a 2018 decision by the Reserve Bank of India (RBI) to move against domestic bank transactions that involved crypto, e.g. exchange purchases.
That banking ban lorded over India’s nook of the cryptoeconomy for two years, causing multiple domestic exchanges to shutter and forcing many Indian traders to migrate their activities to overseas platforms.
However, Industry stakeholders promptly petitioned the RBI’s directive, and this week — to much ado — their petition was finally successful per the Supreme Court’s new milestone decision. A sense of celebration has unsurprisingly swept through India, as Neeraj Khandelwal, a co-founder of Indian exchange CoinDCX, said on the news:
“We thank the Supreme Court and the entire community who stood with us in this case, and for everyone who contributed to the process of reaching today’s landmark decision. Today should be a celebration of the capabilities of young entrepreneurs in this country—I believe the uplifting of this ban will unleash new possibilities for tremendous growth and never-seen-before innovation in India’s technology sector.”
Clarity Breeds More Activity
With regulatory uncertainty around crypto still abounding in jurisdictions around the world, the locales that do offer legal certainty will become increasingly attractive to businesses, projects, and users in the space.
That’s why it would be far from surprising to see an acute uptick in crypto activities in South Korea and India after this week — people will simply feel more comfortable pressing ahead with efforts in these countries now that they know they won’t be engaging in illegal or legally gray ventures.
On the flip side, nations that have proven slow so far in providing comprehensive crypto industry rules are set to experience brain drains from the sector in the years ahead if they don’t step up to the plate soon.
Such slowness bodes for poor strategy if cryptocurrencies do continue to be further legitimized and legislated throughout the world, as it will ensure that other countries will gain considerable leads in the innovation rat race. If the future of money is digital and on-chain, or if there’s a non-trivial chance it will be, then lawmakers should be seriously preparing for that possibility now.