South Korea apparently relaxed its stance on cryptocurrencies as the country’s financial services watchdog said the government will support “normal transactions” in such currencies.
The comment by Choe Heung-sik, governor of the Financial Supervisory Service, boosted the sentiment in the market, sending prices of cryptocurrencies such as Bitcoin higher.
Further, the top official said the government will encourage banks to make transactions with cryptocurrency exchanges, the state-funded Yonhap news agency reported.
A leading market for cryptocurrency trading, South Korea adopted several regulatory measures to curb the excessive speculation in cryptocurrencies. Such moves caused concern in the cryptocurrency market, driving prices of Bitcoin and its peers down early this year.
The country has witnessed intense interest in cryptocurrencies such as Bitcoin with its citizens, both young and old, investing heavily in these with the hope of making a quick profit.
South Korea also hosts several cryptocurrency exchanges, which are largely unregulated. Prices of cryptocurrencies in the country tend to be much higher than elsewhere, reportedly over 40 percent, as buyers exceed those willing to sell. Such premium is called “Kimchi premium” in the local media, in an allusion to the famous Korean dish of spicy pickled cabbage.
Late January, the government implemented regulations that require the use of real name accounts for digital currency trading.
Consequently, local banks are reportedly reluctant to open virtual accounts for cryptocurrency trading, Yonhap said.