Korean Digital Currency Bill to Launch Shortly but Government Has Concerns

The bill to provide a legal framework for digital currencies including bitcoin in South Korea is set to be introduced this month. However, the government still has a number of concerns and needs more in-depth research, as outlined at a parliamentary hearing on Monday.

Also read: South Korea Legalizes Bitcoin International Transfers, Challenging Traditional Banks

Bill Prepared to Launch This Month

At the end of this month, an amendment bill for the Electronic Financial Transaction Act will be introduced by Rep. Park Yong-jin, a member of the Democratic Party, according to local publications on Tuesday. News of him preparing this bill which will address digital currency was first reported earlier this month.

On Tuesday July 18, Park held a legislative hearing to discuss digital currency at the National Assembly Library in Seoul. Public opinions were gathered which he plans to incorporate into the bill he is drafting, News1 Korea reported, and quoted him saying (loosely translated):

Korea still has no legal basis or definition for virtual currency, so it cannot support and nurture it. Without timely financial authorities’ measures, damage to virtual currencies will increase and opportunities for its upbringing will be missed.

“While you can see virtual money as a new type of money, you need to look at it as a speculation or an investment,” commented Han Kyung-soo, a lawyer who attended the hearing. “You need a minimum amount of protection,” he added, referring to regulations for consumer protection.

Bitcoin Discussed at Parliamentary Hearing

Just one day before Park’s public hearing, South Korea’s former deputy finance minister and the nominee to become the country’s top financial regulator, Choi Jong-gu, gave a progress report on digital currency to Parliament. Choi served in the finance ministry for about three decades and was recently picked by President Moon Jae-in to head the Financial Services Commission (FSC).

Responding to Parliament’s inquiries at the hearing which took place at the National Assembly, Choi explained that the government has not set up any regulatory system for digital currencies. “We are starting discussions with other relevant ministries such as the Financial Supervisory Commission and we need in-depth research,” he said, as reported by Kpinews. He then detailed:

Consumer protection, illegal transactions, criminal abuses, and other problems related to virtual currency transactions are starting to show up. We are concerned about whether the financial authorities should be actively involved in the regulation.

Meanwhile, South Korea has recently legalized bitcoin international transfers in order to boost the fintech sector. The move came soon after cryptocurrency trading volumes strongly surged in the country, and an official task force was set up to determine if bitcoin should be regulated at all.

Even with all of the progress in the area of cryptocurrency regulation, Choi told Parliament that “there is a view that it may pass like the tulip investment bubble in Europe,” reported Seoul Finance.

What do you think the Korean government will do about bitcoin? Let us know in the comments section below.

Images courtesy of Shutterstock and Wire

Need to calculate your bitcoin holdings? Check our tools section.