November 26, 2022

By RAYMOND ZHONG

https://www.nytimes.com/2017/12/28/enterprise/south-korea-bitcoin.html

A restaurant in Seoul, South Korea, that accepts Bitcoin. Credit score Yonhap/European Pressphoto Company

South Korea would require individuals who commerce Bitcoin and different digital currencies to take action underneath their actual names, the nation’s authorities stated on Thursday, as a part of efforts to curb hypothesis.

Bitcoin, the best-known digital forex, has been on a gravity-defying bull run over the previous few months. The value of a Bitcoin began the yr at round $1,000 and topped $19,000 earlier this month, inflicting swarms of peculiar savers world wide to get in on what stays a largely unregulated — and extremely unstable — funding.

Nowhere, although, has the frenzy over digital currencies been as fevered, or as sudden, as in South Korea.

Till just lately, markets for Bitcoin and its rivals barely existed within the nation. However a dramatic spurt of curiosity has swept up peculiar individuals from college students to retirees. Buying and selling has turn into so standard that some South Korean exchanges have arrange bodily storefronts the place the uninitiated can study extra and purchase in.

Requiring that buying and selling happen utilizing actual names brings digital currencies like Bitcoin extra in step with different monetary merchandise in South Korea. Though Bitcoin has shed a few of its associations with cost for criminality, the real-name coverage set out on Thursday may additionally make it simpler for the South Korean authorities to trace transactions and to tax capital positive aspects from virtual-currency investments. The value of Bitcoin tumbled after the announcement.

“Cryptocurrency hypothesis has been irrationally overheated in Korea,” the federal government stated in a press release, whereas including that officers would talk about additional potential strikes to stem speculative buying and selling, corresponding to shutting down some digital forex exchanges. “The federal government can’t let this irregular state of affairs of hypothesis go on any longer.”

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The authorities have taken different steps to rein available in the market. In September, South Korea’s monetary regulator banned preliminary coin choices, a method for start-ups and on-line initiatives to lift cash by creating and promoting their very own digital currencies.

Authorities officers, together with the prime minister, Lee Nak-yeon, have made no secret of their issues about investor frenzy.

“This will result in severe distortion or social pathological phenomena, if left unaddressed,” Mr. Lee stated after a cupboard assembly in November.

Kim Jin-hwa, who heads an business affiliation for companies working with digital currencies and different functions of blockchain expertise in South Korea, stated a lot of the nation’s digital forex exchanges may already confirm prospects’ identities through their cellphones. The exchanges, Mr. Kim stated, had additionally labored with banks to develop new measures for guaranteeing transparency.

The federal government is extra excited by sending a warning to buyers concerning the doubtlessly overheated market, stated S.G. Lee, chairman of the Korea Fintech Business Affiliation.

Mr. Lee, who is not any relation to the prime minister, stated he believed the federal government had been hoping to chill the speculative fervor merely by discussing tighter regulation — and never by truly implementing too many guidelines. Officers fear, Mr. Lee stated, that extra regulation would give digital currencies higher legitimacy within the eyes of the general public, and improve buying and selling exercise.

“It’s actually difficult for the federal government,” Mr. Lee stated. “They’re nervous about giving a mistaken notion to the individuals.”