We have long been talking about China’s decision to say no to Initial Coin Offerings. However, thinking that China has been the only country to do so in Asia is wrong. South Korea also banned its ICO rounds as early as September, responding to an increased swindling from ill-meaning parties paired with the interest of the country’s own citizens into investing into a currency that had little backing from any meaningful institution. Quite understandably, nobody was pleased with the enacted measures, but in retrospect, it has probably been the right thing to do. Let us go through the motions here.
Let us first look at South Korea. South Korea is a trailblazer of cryptocurrencies. The country has one of the most vibrant economies when it comes to FIAT currencies, but its citizens are particularly digital-savvy and prone to cotton on the latest trends in technology. You will certainly understand why China has been reluctant to encourage its citizens to participate in what is mostly thought of as a fad. However, there are palpable signs that the march of cryptocurrencies can continue for years to come and there is hardly stopping that. If cryptocurrencies flounder at some point, it is likely that the practices that they have though regulators and financial bodies would very much remain in place and there is hardly stopping that.
By one estimate, cryptocurrencies will simply make the financial system a safer medium of exchange. This is very likely with the smart contracts technologies pioneered by Ethereum and the even more ambitious cryptocurrency by the name of QTUM.
By all measures, cryptocurrencies will lead the future, however little is known if they will lead the future of money in their current form.
The Changing Legislation in South Korea
While South Korean government and officials remain ever more concerned about what the adoption en masse of crypto gold could bring their country, many people are now probing alternatives, such as the introduction of overseas cryptocurrencies, or just using their capital in overseas investment to kickstart ICOs.
This sounds risky and it largely is. Essentially, it makes sense to have a legitimate framework that can regulate such loopholes, but while South Korea is struggling to come up with a way to control its own companies that dabble in crypto at home, this may sound like a tall order. Not only that, but China has already decided to sever ties with foreign exchanges and hamper its home investors from dabbling in ICO undertakings.
Whereas China has always been on its own and done justly by itself, South Korea should ask itself if it could afford to suffer the same consequences. Now, this may sound as an exaggeration because nothing particularly bad would follow.
Put simply, South Korea and China will remain without access to crypto exchanges, which they can use to track any sort of illicit crypto payments that could be useful later down the road. By opting out of the international crypto order, flimsy and intangible as it may be, the two countries will de facto take on their own crypto world and seek to establish regulations that may not dovetail neatly with foreign rules, if such are ever established.
South Korea and China – Together in a Sea of Uncertainty
South Korea and China will both strive to achieve something better for their countries, and there is no denying this. However, China is somewhat better poised to take on the future. De facto, China is looking for a way out of the pesky international financial order and to introduce an alternative to the predominant reserve cryptocurrency, the US dollar.
However, China is way better-prepared to ensure its own future where digital currencies are concerned. The country has been debating to introduce a digital FIAT currency that will make it the world’s first to use such a way to distribute its money.
If anything, China is best prepared to take on such a challenge for several reasons:
- Chinese citizens have long been accustomed to shopping around digitally, and there is no stopping them right now. Introducing a digital bit of money would make no odds for the tech-savvy population;
- Chinese nationals tend to put a great store by their mobile payment solutions, which they have been using for a long while. Conversely, they find paper money to be a nuisance and uncomfortable on many occasions.
South Korea could hardly boast the same track record and it is ill-equipped to pioneer such a grand scheme. For one, investors in South Korea are allowed to be way more free both in their actions and investments, whereas in China people need to align with the government to kickstart any project. The road ahead is definitely challenging.