The Anticipated Bullish Bitcoin and Cryptocurrency Advancement from South Korea Has Yet to Arrive – Here’s the Latest Situation
New regulations in South Korea aimed at allowing companies to hold and trade Bitcoin and other cryptocurrencies have been delayed due to the lack of government-issued guidelines. Financial analyst Kim Tae-young emphasized that regulatory clarity is critical as companies express frustration over falling behind competitors in the US and Japan. Current laws prohibit businesses from opening crypto wallets, though exchanges like Upbit and Bithumb have begun preparing corporate services. The roadmap announced by the Financial Services Commission earlier this year planned a phased introduction of corporate crypto trading, yet delays are now attributed to the unexpected June presidential election and government restructuring.
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Regulatory Uncertainty in South Korea's Crypto Market
New regulations in South Korea that would allow companies to purchase Bitcoin and other cryptocurrencies on their balance sheets were initially expected to come into effect by the end of the year. However, according to Sisa Journal, the government has not issued the necessary guidelines yet, leaving the crypto sector in a state of limbo.
Critical Impact of Corporate Entry into Cryptocurrency
Kim Tae-young, a financial analyst at Sisa Journal, explained, “The corporate market's entry into crypto is expected to significantly change the landscape of the industry. Therefore, the guidance issued by financial authorities is critical. Companies are waiting for the go-ahead, but regulation is constantly being postponed.”
Challenges Faced by Local Crypto Exchanges and Companies
Local crypto exchanges claim that the regulatory uncertainty is slowing down the market. South Korean companies observe that their competitors in the US and Japan have already acquired Bitcoin treasuries, leaving them lagging behind. Moreover, current regulations don't even allow companies to open crypto wallets.
Gradual Roadmap Announced by Financial Authorities
In February, the Financial Services Commission (FSC) announced a phased roadmap to allow companies to trade crypto assets:
- The first phase permitted crypto sales to NGOs, government institutions, and universities.
- The second phase would allow businesses to trade cryptocurrencies.
- The final phase includes allowing banks to open crypto wallets.
These announcements spurred major exchanges to develop corporate services.
Corporate Interest in Crypto Services
Market leader Upbit reported having over 160 corporate clients, while Bithumb works with approximately 100 companies. However, Kim Tae-young noted that "the actual number could be much higher," due to potential clients who have already submitted their documents for approval.
Frustration Among Local Business Leaders
Park Ju-young, a media company owner in Seoul's Gangnam district, voiced her frustration: “In the US and Japan, companies can purchase Bitcoin freely. Why are we being blocked here? The money is ours, and the decision should be ours.”
Reasons for Policy Delays
Kim Tae-young attributed the delays to the unexpected presidential election in June and the prolonged government restructuring afterward. This has left businesses waiting for much-needed guidance to move forward.
This is not investment advice.