As a hi-tech hub better-known for its client electronics, tech giants, esports, and global innovation, maybe it’s not stunning that a report by Cindicator disclosed that South Korea can play a serious role in cryptocurrency adoption. By reviewing existing data on exchange volumes, recent economic history, regulation, and trends, the tokenized fintech asset management company came to some fascinating conclusions.
Based on existing proof, the country of 50 million inhabitants and one of the world’s top 15 economies is poised to play a serious role in embracing cryptocurrencies. This is because of a combination of things like exchange infrastructure, a high level of tech adoption, and also the country’s regulatory and tax framework.
A Crypto-Friendly Population
When listing the top crypto-friendly countries in the world, seldom will South Korea create the cut. Malta, Singapore, Switzerland, and Estonia are typically more top-of-mind. However, South Koreans with their insatiable appetite for hi-tech take the cake in terms of the population’s attitude.
South Koreans, in fact, account for roughly 30 % of total cryptocurrency trading worldwide, with some 30 % of all salaried employees owning and trading crypto assets of some kind. Certainly, the country’s recent economic history and growth is a issue, but for a fairly little country, it has a extremely developed cryptocurrency exchange scene.
The South Korean Exchange Infrastructure
South Korea has a terribly developed cryptocurrency exchange scene with Bithumb, the largest Korean exchange, ranking in the top spot over the last thirty days in terms of trading volume in USD, (data from November 22). There's also Upbit, Coinone, and Korbit. Most of the market is cornered by Bithumb and Upbit (86 percent).
According to the report, there have been lots of cases in which simply the announcement of an altcoin getting listed on either of those exchanges saw its price rise by ridiculous proportions. When tron (TRX) was listed on Bithumb in April 2018, its value went from $0.03 to $0.05 in as little as 3 hours.
The Cindicator report states:
"There is no doubt that Korean exchanges are a key part in trying to analyze the crypto phenomenon in the Asian.”
Leading Crypto projects for Mass Adoption
Coinone is functioning on a blockchain project to create cash transfers easier round the globe, whereas Bithumb also recently announced a payment service in partnership with Qoo10. This company is widely referred to as the “Asian Amazon.”
There are also lots of other businesses that are taking blockchain tech to the mainstream, including accelerator projects like Deblock.
Regulation is coming Around
South Korea was significantly plagued by Ponzi schemes and alternative sophisticated crypto scams. This, coupled with an outsized trading volume that caught the attention of regulators, lead them to take an initially strict stance on cryptocurrency. In fact, from September 2017 through March 2018, each ICOs and also the anonymous trading of crypto were prohibited.
These restrictions saw lots of subsidiaries and projects heading offshore to Singapore to launch ICOs, although the value of doing this was prohibitive to startups.
Regulation in the country is beginning to thaw, however, and seems to have been an initial reaction to deal with the rampant problems in the ecosystem, like scam ICOs, and hacks.
The Korean government recently declared one trillion won (USD $880 million) to spend on blockchain development in 2019 as a part of a 5 trillion won package to stimulate the economy through innovation.
This is a telling indicator that South Korea is changing its stance and making a a lot of favorable climate for blockchain technology and the legitimization of cryptocurrency.
Taxation
South Korea has a terribly high taxation rate. However, since 2013, bitcoin and different cryptocurrencies are exempt from capital gains tax. This is important for traders and investors since they will keep 100% of their profits. It also makes navigating crypto taxation rather more simple. While there are rumors that this tax haven on crypto is also about to modification, no official line has been taken.
Head of Analytics at Cindicator Simon Keusen commented that their analysis indicates that South Korean influence in the international blockchain industry can continue to increase:
"The country is incredibly receptive new technology. The passion for crypto assets is palpable. Latest legislative initiatives show that the govt understands the potential of blockchain technology.”
He concluded that:
"South Korea can play a crucial role in driving the adoption of cryptocurrencies globally.”
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