Japan's leading digital coin exchange arrives in Korea
BitPoint Japan President Genki Oda, right, speaks during a press conference for BitPoint Korea's launch at the Shilla Hotel in Seoul, Wednesday. On the left is BitPoint Korea CEO Kim Young-man / Yonhap
Korea still unregulated while Bitcoin price surges to $10,000
By Nam Hyun-woo
BitPoint Korea, a joint venture company of BitPoint Japan, announced Wednesday its official launch of digital token trading, with the goal of building a virtual currency payment ecosystem in Korea.
“When it comes to cyber currencies, the country which has greater growth potential than Japan is Korea,” BitPoint Japan President Genki Oda said during a press conference at the Shilla Hotel in Seoul.
“BitPoint Japan surged because it has a security and control system that is at the same level of financial services providers in Japan. We believe this is will be the strength for BitPoint Korea too.”
Korea’s daily virtual currency trading volume averages 2 trillion won, which is the third largest in the world.
BitPoint Japan is one of the top three cyber currency exchanges based in Japan and the first exchange operator in the country to earn government approval in September. Japan has the largest digital token trading volume in the world, with its government in April recognizing Bitcoin as a legal tender and approving 11 firms as legitimate operators.
BitPoint established itself in Korea in August and has been running beta tests since Nov. 1.
According to BitPoint Korea, its trading will be based on the MetaTrader 4 platform, widely used by online retail foreign exchange brokers because of its automatic trading feature. Also, it will use BitPoint Japan’s security system and servers in order to allow investors to trade more safely.
Oda said, however, the real strength of BitPoint will be within the payment ecosystem that the firm is currently building.
“The true worth of cyber currency is not as a tool for investment or speculation. Its true value will come when you can use digital currencies in any country in the world without changing it into the local currency,” Oda said. “BitPoint’s top priority right now is actual payment at shops and stores through virtual currencies.”
Since May, BitPoint has been providing digital currency payment services at Peach Aviation, an All Nippon Airways affiliate low-cost carrier. Also, Oda said BitPoint is in the process of talking with a number of convenience store chains in Japan about payment.
He said that the exchange operator is considering payment services in countries such as Singapore, Australia and the U.K., adding that ”all you will need will be a BitPoint wallet for payment in those countries.”
In Korea, according to BitPoint Korea CEO Kim Young-man, the firm is in discussions with a number of large online shopping websites about payment services. He declined to name those websites.
“Unfortunately, we think the prompt legalization of digital currency trading in Korea should come first,” Kim said. “As we see in Japan, an industry emerges and advances under its government’s legalization and regulations. We hope the Korean government will create a legal system in which exchanges can protect customers.”
Unregulated Korea
Korea does not recognize cryptocurrency exchange operators as financial service providers because the government and the law still do not recognize digital tokens as legal tender. Exchange operators here, including No. 1 trader Bithumb and a slew of others, are categorized as online vendors, thus not regulated by finance-related rules.
Calls have been growing that investments in such tokens should be done within the rules of finance as the craze over virtual currencies is sweeping Korea amid their blistering rally.
On Thursday, Bitcoin soared to an all-time high above $10,000 on major exchanges across the world. As of 1:30 p.m., Thursday, bitcoins at Bithumb were traded at 12.8 million won ($11,821).
The currency has soared more than 900 percent so far this year, posting the largest gain of all asset classes, because of expanded public use and increased institutional demand.
With many jumping into virtual currency trading, observers say the government will likely come up with relevant regulations that will be similar to those in Japan.
“Japan’s legalization of virtual currency trading is not about recognizing them as legal tender. It is more about giving a special lift on trading,” Oda said. “The Japanese government approves trading only when identity verification is fully done, the exchange is preventing money laundering and managing clients’ money separately. I believe Korea is also following a similar way.”
A day earlier, edaily, an economic news outlet in Korea, reported that the Korean government is thinking of designating virtual currency exchanges unlawful, but will only allow exchange operators with enough measures to protect investors to conduct business. It is interpreted that the plan is a mixture of the government’s stance of not recognizing virtual currencies as legitimate and the necessity of proper regulations on digital token trading.