South Korea is considering Bitlicense system for digital currencies

New regulation system

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Regulating Cryptocurrency has been the talk of many governments with each country considering different measures which they find favorable. In South Korea the regulators are planning to introduce Bitlicense approval system for all cryptocurrency exchanges according to Business Korea. One official actively involved in the government’s task force told us that: “We are considering the use of an exchange approval system as an additional regulation on digital currencies. We are likely to benchmark the model of New York State which gives a selective permission.”

In New York exchanges are only allowed to trade digital currencies after obtaining a charter or a license called Bitlicense which is offered by the New York State Department of Financial Services. The State is very strict and before approval capital requirements must be met. Actually so far only 6 firms have been approved. The state has granted Bitlicense to XRP II, Coinbase Inc., Circle Internet Financial and Bitflyer, USA. It has also issued Charters to Gemini and Itbit.

The Korean official went on to state that:

“When the government brings in board the New York model it will have brought digital currencies into the institutional system and it will be easy to supervise the market in an organized manner.” He however stated that the decision would be made after the June elections.

The South Korean government announced regulation in December in an effort to stop speculation. It even threatened a total ban. However, it has now changed its stand stating that there is no need to ban Bitcoin because the speculation has reduced. Bitcoin which is the most popular digital currency had soared to almost $20,000 but the regulation talk saw a panic sell out and at this time Bitcoin is trading at around $8,970.

Last week cryptocurrency investors were relieved after the country’s prime minister stated than banning cryptocurrencies was not a serious consideration. More to that Deputy Prime Minister Kim Do-yeon also stated that: “There is no need to get rid or suppress digital currencies.”

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