Cryptocurrency Impacts in South Korea

Over the last four decades, innovation and technology have played a critical role in South Korea. Because of the different industries, it pursues, such as shipbuilding, petrochemicals, and electronics, Korea has created a reputation for its brands and products. The country struggles to sustain its economic viability with a population of around 52 million people, the bulk of whom are older. When it comes to investing in Korea, you may find yourself in the dark. Nonetheless, urbanization has mitigated this issue to a degree.

The country’s GDP rate in 2016 was 2.8 percent. Due to significantly improved financial conditions in South Korea and the difficulty in adjusting to life abroad, many South Korean expats have returned home. It has become popular to invest in cryptocurrencies among Koreans and Korean residents due to booming Korea’s current economic conditions.

Development Of The Economic Sector In South Korea

Financially and on a global scale, South Korea burst onto the scene in the 1980s, heralding the start of the global economic boom. Korea was a poor country in the 1960s and it was never a favorite to survive and eventually was assumed to be taken over by North Korea.

Since the 1970s, its economy has evolved from a primarily agricultural economy to a strong global participant with a diverse range of industrial sectors such as electronics, metals, and autos. The Korean Peninsula is one of the few Asian countries that is both politically democratic and carries out the Korean Wave worldwide.

According to experts, Korea’s economic growth is a marvel, because similar factor conditions in other countries have not resulted in economic growth. The belief that having raw brains and invention is required to make a company enormous is widespread in Western countries. This paradigm has been abandoned in favor of the ABCD model in Korea. This method can be used to conduct a comparative analysis of enterprises from diverse countries. The four fundamental pillars of Korean competitiveness, according to ABCD, are agility, benchmarking, convergence, and dedication.

Despite being close to 0 percent of GDP nearly two decades ago, Korea’s exports account for more than 70% of its current GDP. China is Korea’s largest market, unseating the United States. A similar rate of growth occurred for imports as well.

A Preview Of South Korea’s Ethical Threads On Cryptocurrency

South Asian markets for cryptocurrency transactions have been in the bubble since China prohibited cryptocurrency trading in 2013 and ICOs altogether in 2017. In the face of these restrictions, South Korea stepped in as a savior to establish itself as a leading market in the segment. Korea is known for its population density, which is attributed to the country’s fast-paced lifestyle and tech-savvy generation. With the introduction of numerous platforms for trading cryptocurrency, the number of traders in the South East has expanded significantly.

Furthermore, it is regarded as one of the world’s most technologically sophisticated cities As a result, the South Korean Won and the Japanese Yen are the most widely traded currencies for Bitcoin (BTC) and Ethereum (ETH) transactions. A trading volume of almost 100,000 transactions is recorded every single day. Korea’s crypto trading scene is a lot like gambling; traders do not want to hold their coins, but only speculate on them to their maximum advantage. As a result, there are a number of impulsive traders who seek fast and short-term gains. As new coins are being introduced to the market, Korea’s crypto traders, who are very reactive traders, have an immediate desire to know more about these coins and their rapid growth.

The acquisition of Korbit by gaming behemoth Nexon was the largest and first-of-its-kind deal since it was the country’s first Bitcoin exchange. This occurred even with Korea’s lives on three main exchanges, Coinone, Bithumb, and Korbit, together dubbed as the “Korean Pump.” Over the last few days and weeks, the value of coins like IOTA, Litecoin, and Bitcoin Cash has grown, leading to increased trading volumes. Litecoin’s value has more than quadrupled with Korean traders’ help. Korean traders continue to influence cryptocurrency prices, and the West should pay attention to what they like so that they can stay in the game as well.

The Government’s Reaction

The South Korean government is actually preparing a bill banning trading through cryptocurrency exchanges, reported Justice Minister Park Sang- Ki on January 11, 2018. The biggest cryptocurrency exchanges in South Korea, Coinone and Bithumb, were directly affected by this. An audit of the exchanges was conducted by the tax agencies to screen for possible tax evasion. Taxing heavily this market is still one of the Finance Ministry’s concerns, as the size of the market has grown so large that it has exceeded the Kosdaq exchange in daily trading volume. A CoinMarketCap website removed the price of bitcoin from the South Korean exchanges, causing Bitcoin’s price to plummet. There was a 30 percent premium to be had on the virtual coins at that point. Concerns over such assets being used for crimes forced both exchanges to reveal their paperwork.

Cryptocurrency trading has become highly speculative in the recent trend, which has made the market a boom. Initial Coin Offerings (ICOs) place a great deal of importance – a contentious crowdfunding practice where companies raise money by trading their newer virtual cryptocurrencies for more established currencies like Bitcoin and Ethereum.

The South Korean market is historically protected. There was a serious legal issue faced by US private equity firm Lone Star in the mid-2000s, after which the South Korean government initiated office raids. It did this by controlling a significant stake in a South Korean bank, where it made millions. It is being done to curtail speculative trading. Moreover, it suggests the government is afraid of the influx of South Korean money into foreign entities, which could lead to the opening of new markets abroad. Additionally, the government is using the ban to try to avoid accountability for not controlling the hyperinflated cryptomarket. There have been reports of a potential cryptocurrency ban in China considering ICOs as a possible threat to national security. Following that, the government intends to prohibit any action that might lead to market price manipulation, money laundering, or tax evasion.

The recent disclosure that Choi Heung-Sik, the head of the Financial Supervisory Service, discovered that one of his employees, who were part of the task force to develop crypto regulation, was profiting from internal information has fuelled the move toward regulation even more.

Conclusion

Korea has shown great economic and technological progress in the last four decades and has integrated with the world economy. In terms of its technological reach, South Korea is the most advanced in the world thanks to Seoul’s track record of being “the leading digital city” and also the “tech capital of the world”. Due to a large number of technology-oriented people, cryptocurrencies have been widely accepted by the public. The transfer of funds in cryptocurrencies can be protected by using public and private keys. The trend is a significant technological breakthrough since it streamlines payment procedures by decreasing transaction costs. The world’s largest cryptocurrency exchanges are located in South Korea.

 

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