According to industry sources on Friday, blockchain businesses are expressing concerns over the impact of cryptocurrency regulations, despite the government’s assurance that it would support the latest technology. (Image: Kobiz Media)
SEOUL, Jan. 12 (Korea Bizwire) – The government’s move to regulate cryptocurrency trades could hurt the blockchain industry, experts have warned.
According to industry sources on Friday, blockchain businesses are expressing concerns over the impact of cryptocurrency regulations, despite the government’s assurance that it would support the latest technology.
“The growing number of cryptocurrency transactions was expected to boost the market for optional services such as system development, before the government’s regulations changed economic projections,” a source close to the IT service industry said.
Shin Min-soo, a professor of business administration at Hanyang University, says the government needs to present regulations more clearly.
“Many small and medium-sized companies developing blockchain products will likely be affected by government interference,” Shin said.
Blockchain, a technology that helps manage data in ‘blocks’ among multiple parties involved, is known for its low cost and strong security, and can be used in the fields of finance and distribution.
According to Gartner, a market research firm, the international blockchain market is projected to reach around 11 trillion won by 2022.
However, an official at SK C&C, a company that is pursuing a blockchain-based distribution business, is not worried.
“Cryptocurrency is only one of the numerous services based on blockchain technology. We don’t believe our projects will be heavily impacted,” the official said.
Another official at LG CNS, where a blockchain-based financial service is in the works, also said little to no impact has been felt.
“Rather, the controversy (surrounding cryptocurrency regulations) could generate publicity for the companies developing service models using blockchain,” the LG CNS official said.
Blockchain has been seen as a key technology for the Fourth Industrial Revolution, prompting the government to pledge active support.
Deputy Prime Minister Kim Dong-yeon also acknowledged on Friday that blockchain technology will play a significant role in the current industrial revolution, while calling for a more balanced approach given the close link with the security and retail industry.
Following the reports of cryptocurrency regulations, which have dented demand for graphics cards among investors, there are fears computer hardware manufacturers will take the first hit.
Ashley Song (ashley@koreabizwire.com)
