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Anything is Still Possible for Crypto in South Korea

Tim Alper
Last updated: | 2 min read

All may not be lost for the cause of initial coin offerings (ICOs) in South Korea – in the wake of a decision by the country’s top financial regulator to uphold a ban on ICOs, announced last week.

Source: iStock/ktsimage

The regulatory Financial Services Commission (FSC) has announced that the ban would remain in place, but some experts appear unconvinced that this policy will hold water long-term.

The government is continuing to prioritize blockchain technology growth, and the National Assembly’s Industry 4.0 committee last week officially welcomed in some half a dozen external blockchain technology experts.

The committee is divided into three subcommittees – focusing on the potential of blockchain, AI (artificial intelligence) and Big Data as “new growth engines” for the South Korean economy. The subcommittees had been due to disband late last year, but per an official announcement, their working period has instead been extended until the end of June this year – a sign, suggest some, that the government is still in its early stages of policy formation, meaning that essentially, anything is still possible when it comes to cryptocurrency and blockchain policy formation.

And per a report in Herald Kyungjae, South Korean ICOs could yet see the light of day in special “sandbox” conditions. An MP from the ruling Democratic Party, Lee Sang-min, has put forward a private members’ bill that – if passed – would require the creation of a special blockchain “promotion and research” zone where “certain” ICOs may be green-lighted.

Lee, a fierce advocate for pro-blockchain policies, has won considerable support for his bill, which will be read later this month. He has spoken of the importance of allowing South Korean companies to “challenge relentlessly via bold deregulation.”

Other experts have warned the government that its attempt to separate its blockchain policy from its cryptocurrency stance could incur prohibitively high costs. Herald Kyungjae quotes Han Ho-hyun, a professor of Computer Engineering at Seoul’s Kyung Hee University as stating that the government might need to spend “over USD 90 billion” over the next three years on promoting and adapting blockchain technology – comparing the level of potential spending to that in the 1990s when the government built broadband networks that gave the country the fastest internet speeds on the planet.

Han said, “The government must choose a blockchain industry promotion plan that will let it escape from the conundrum of whether blockchain technology and cryptocurrency policies can in fact be separated at all.”