10 reasons why there should be a change in how we view cryptocurrency
“Develop blockchain but regulate cryptocurrency.” This has been the stance of the Korean government on the new technology. However, the global competition surrounding the technology is moving fast, and there needs to be a change in how we view cryptocurrency. First, Facebook’s announcement of its Libra cryptocurrency project has led the country to respond. If cryptocurrency is useless, there wouldn’t be a need to prepare for Facebook’s cryptocurrency. However, within a month of the tech giant’s announcement, the Financial Services Commission (FSC) released a report analyzing Libra. Second, the global community is focused on discussions about managing cryptocurrency rather than rejecting its existence. At the Group of 20 meeting in Osaka, Japan late last month, global leaders agreed to standardize the name of cryptocurrencies as “Crypto-Assets.” Third, in an era of technological revolution, a black-and-white view placing constraints on certain technologies is not conducive to develop industries. If Korea did not promote the internet 20 years ago, we would not have become an IT powerhouse today. Fourth, our competitors are moving fast. The People’s Bank of China said it would issue its own digital currency. Singapore’s tax agency proposed measures to accept digital transaction tokens that would exempt transactions using cryptocurrencies from the goods and services tax. Fifth, cryptocurrency technology is developing fast. The number of transactions per second for cryptocurrencies is increasing as a wide range of wallets and payment solutions are being introduced. Apple recently unveiled its “CryptoKit” for developers. It allows for the development of cryptocurrency wallets on iPhones. Sixth, Korea’s financial revolution is developing fast through the regulatory sandbox program. The FSC has approved 37 services over 100 days allowing them under certain conditions despite existing regulatory hurdles. This will allow blockchain technology’s potential to be tested in the financial ecosystem. Seventh, Korea has all the potential to develop crypto technology as it is a leader in adopting digital solutions. The government placed first in the United Nations E-Government Survey in 2010, 2012 and 2014. Eighth, it is impossible to decrease cryptocurrency crimes with regulations that are unclear. The Korea Institute of Criminology said in a report that blockchain’s value resides in technological innovation and that related-crimes are side effects. It added that such an innovative tool should not be restricted based on the fact that there are side effects. Ninth, major tech companies such as Samsung, Naver and Kakao have already started cryptocurrency-related projects. Samsung’s Galaxy S10 has a cryptocurrency wallet, while Kakao has issued a cryptocurrency that will be distributed through the Klaytn platform. Last, regulating cryptocurrency goes against the government’s policy of encouraging start-ups. Start-ups try to solve problems for an uncertain future through a pioneering mindset. Regulating cryptocurrency and encouraging blockchain suppresses Korean start-ups in the global race to develop the technology. Even if Facebook’s Libra fails to launch, there will be a new Libra. We need a change in perspective toward cryptocurrency.