By Jhoo Dong-chan
The government has come under growing criticism for showing discord in dealing with the controversial cryptocurrency trading.
The justice ministry said Thursday it was preparing a bill to ban cryptocurrency trading and shut down all exchanges in Korea.
But Cheong Wa Dae later denied this, saying the ministry's stance was not a final policy. The dissonance caused extreme confusion on the virtual coin market.
Justice Minister Park Sang-ki said during a press conference that the ministry will push ahead with its plan to take the stern measure against virtual coin trading. His announcement follows the financial authorities' investigation into six of the country's major banks that offered virtual accounts to investors and institutions.
"They are not even currencies. I believe cryptocurrencies are more like an imaginary symbol because they don't work as a means of real currency," Park told reporters.
"There are great concerns about virtual currencies. The justice ministry has delivered its negative view to other government agencies and we are now preparing a bill to stop cryptocurrency trading through exchanges."
Park added he can't comment on a specific timetable for the legislative process, but said his ministry has come up with a plan to counter speculative investments in virtual currencies after discussions with the finance ministry and financial regulators.
"The ministry has expressed its concerns that cryptocurrency is a bubble which will eventually burst, but it is difficult to predict when that will be," Park said. "Now, it is more like gambling or speculation. But too many people are throwing their luck into virtual value. The funds should be invested into our industries. We can't just stand idly by on an outflow of national wealth."
However, Cheong Wa Dae is showing a cautious approach toward the virtual currency trading.
"Park's remarks are just one of the options on the table," presidential office spokesman Yoon Young-chan said.
"I understand the Ministry of Justice has multiple options to curb the market. Nothing has been finalized at this point. The administration has yet to reach a conclusion, and a bill will be introduced after detailed discussion between related government agencies."
Cryptocurrency investors express their dissatisfaction, calling for the government to take a unified stance with the market.
"The price of virtual coins plunged once again after Park's remarks, and recovered a little following Cheong Wa Dae's announcement," cryptocurrency investor Kim Hwan said.
"The government intervention into the market is inappropriate, especially when they haven't come up with a unified conclusion. The virtual coin system will eventually revolutionize the finance system. The government can't just ignore and ban the market while the world's changing."
Based on cryptocurrencies' source technology, dubbed blockchain, participants can transfer digital coins across the internet without the need for a central third party.
Buyers and sellers interact directly without needing verification by a trusted third-party intermediary. Transactions are not anonymous, but pseudonymous ― a transaction record is created, but identifying information is encrypted and no personal data is shared.
Its security relies on the lack of a single failure point. In addition, compromising the system is almost impossible because so many dedicated miners offer computing power for the network. Even if the world's top 500 supercomputers were to collaborate, it would be practically impossible to disrupt the network due to the power of the distributed ledger.
Recognizing the value of related technologies, a number of European countries have started investing to develop effective instruments to revolutionize their financial systems through increased cryptocurrency understanding.
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