SEOUL, Jul. 4 (Korea Bizwire) — The South Korean government is accelerating its efforts to embrace the use of cryptocurrencies typified by bitcoin in the public sector, amid growing demand for digital assets that could replace physical money in the future.
Lawmaker Park Yong-jin, a member of South Korea’s ruling Democratic Party, announced on Sunday plans to propose a cryptocurrency reform bill by the end of July, which will see a new clause added to the Enforcement Decree of the Electronic Financial Transactions Act requiring business operators using digital currencies to seek approval from the Financial Services Commission.
To be granted approval, applicants are asked to prove possession of over 500 million won in initial capital with the required security infrastructure and staff to protect users.
Park’s proposed motion comes after criticism over a lack of regulations and measures concerning digital currencies in the South Korean legal system, which saw the country face growing problems of cryptocurrency speculation and fraud in recent years alongside the U.S., Japan and China.
“Despite a recent surge in the number of transactions, the definition of cryptocurrency hasn’t been fully established in the country and many of the exchanges have occurred outside legal boundaries. As a number of developed countries seem to be prepared legally to embrace the use of cryptocurrencies, South Korea must follow suit and begin the conversation with regard to regulations and policy before it’s too late,” Park said.
Last year, a bill was passed at the National Assembly allowing fintech companies to send money abroad using digital currencies such as bitcoin beginning in July, while lifting the requirement of name verification for transactions under one million won.
Amid a shift in the government sector to embrace the use of cryptocurrencies, the Korea Asset Management Corporation (KAMCO) announced last month that bitcoins collected as proceeds of crime could be sold at a public sale.
“Apart from currency, movable assets or marketable securities can be sold at a public sale. Though it’s unprecedented, it shares a similar nature to stocks in that the market value of both can fluctuate,” a KAMCO official said.
If KAMCO decides to proceed with the public sale process of bitcoins, it will be the first case in the country for a government branch to officially acknowledged the value of cryptocurrency.
In America, the FBI put some 144,000 bitcoins collected during an investigation into the online black market Silk Road up for public sale with the approval of the Department of Justice.
Ashley Song (firstname.lastname@example.org)