The South Korean government is considering its cryptocurrency exchanges to be based on the Bitlicense model which is developed by the New York State Department of Financial Services.
An official of the government’s virtual currency task force said in his statement that serious considerations over the adoption of an exchange approval system are being made on the additional regulation on cryptocurrencies and that the model of the New York State Department of Financial Services would be rendered into planning.
Bitlicense has restrictive controls and has srtict capital requirements and due to this only 6 firms have been approved by the State of New York to trade in digital currencies. Coinbase Inc being one of the famous ones to operate upon Bitlicense.
“The main motive to adopt the existing model from New York and to incorporate it into the South Korean financial circuit is to introduce cryptocurrencies to the nation and supervise the workings of the market in an orderly fashion. The final decision regarding the same would most likely be conveyed during the local elections in June.” conveyed the news outlet.
In lieu of this move, cryptocurrency trading data was requested by NYDFS from South Korean regulators after two agencies conducted inspections of 6 major South Korean banks.
Bithumb, one of South Korea’s largest cryptocurrency trading exchange reported that as on December 15, Bitcoin was trading at over 20.2 million won (~USD$18,500). This led to the government announcing regulatory measures towards cryptocurrencies in mid December. Some extreme measures like including an outright ban of crypto trading and closing down crypto exchanges was considered by the government to suppress speculation.
As of now, Bitcoin is valued at approximately 9,747,000 won (~$8,967), prompting Korean regulators to believe that “as the speculation has subdued, there is no need to use a hard-line policy, including a total ban on trading.” In addition, the South Korean prime minister himself, at a National Assembly last week asserted that closing down cryptocurrency exchanges is not a serious consideration.