By Kang Seung-woo
Companies based on cryptocurrency and blockchain are considering leaving Korea as the nation prepares to introduce strict regulations, including banning all transactions through digital token exchanges.
A source familiar with the issue said Friday that many players had already halted new activities, such as sales promotion.
"Many of my clients are not comfortable with Korea, which threatens to come up with such blanket measures as shutting down exchanges," said the source, who offers consulting services to foreign blockchain companies.
"Some of them are feared to leave the country any time. A U.S. firm is ready to exit Korea if the Seoul administration draws up strong regulations.
"It is understandable for the government to try to regulate the market because the crypto craze is very serious in this country.
"But I am afraid that very strict regulations will choke new business opportunities with regard to virtual money and blockchain."
Blockchain refers to a peer-to-peer network where many people participate to provide computing power for the security of the decentralized system. It has a built-in payment system and well-known examples are those involving Bitcoin and Ethereum.
Unlike conventional systems, blockchain does not need third-party intermediaries. It therefore has no single failure point, which is why blockchain is safer than middlemen-backed old institutions like banks, brokerages and governments.
It is practically impossible to hack the system because of its unique structure and great computing power offered by distributed users. Even the combined computing power of the world's 500 most powerful supercomputers cannot match the Bitcoin blockchain.
More companies are investing in the new technologies with high upside potential in such areas as banking, insurance, cyber security, ride sharing, data storage, charities, voting, healthcare, energy management, online music, retail, real estate and crowd funding.
Against this backdrop, more governments are supporting development of blockchain technologies.
The Korean government has also promised to encourage blockchain technologies, but the negative views of the bitcoin craze seem to be overwhelming such attempts.
The source said that Asia's fourth-largest economy may end up losing big business opportunities.
"Many are saying that we should develop blockchain technology even though we restrict Bitcoin transactions," the source said. "But it is simply impossible because the two are very closely associated.
"I am worried that I may lose clients due to the restrictions. They would also be bad news for Korea because the country would lag behind in global competition for the potential-loaded businesses."
Companies based on cryptocurrency and blockchain are considering leaving Korea as the nation prepares to introduce strict regulations, including banning all transactions through digital token exchanges.
A source familiar with the issue said Friday that many players had already halted new activities, such as sales promotion.
"Many of my clients are not comfortable with Korea, which threatens to come up with such blanket measures as shutting down exchanges," said the source, who offers consulting services to foreign blockchain companies.
"Some of them are feared to leave the country any time. A U.S. firm is ready to exit Korea if the Seoul administration draws up strong regulations.
"It is understandable for the government to try to regulate the market because the crypto craze is very serious in this country.
"But I am afraid that very strict regulations will choke new business opportunities with regard to virtual money and blockchain."
Blockchain refers to a peer-to-peer network where many people participate to provide computing power for the security of the decentralized system. It has a built-in payment system and well-known examples are those involving Bitcoin and Ethereum.
Unlike conventional systems, blockchain does not need third-party intermediaries. It therefore has no single failure point, which is why blockchain is safer than middlemen-backed old institutions like banks, brokerages and governments.
It is practically impossible to hack the system because of its unique structure and great computing power offered by distributed users. Even the combined computing power of the world's 500 most powerful supercomputers cannot match the Bitcoin blockchain.
More companies are investing in the new technologies with high upside potential in such areas as banking, insurance, cyber security, ride sharing, data storage, charities, voting, healthcare, energy management, online music, retail, real estate and crowd funding.
Against this backdrop, more governments are supporting development of blockchain technologies.
The Korean government has also promised to encourage blockchain technologies, but the negative views of the bitcoin craze seem to be overwhelming such attempts.
The source said that Asia's fourth-largest economy may end up losing big business opportunities.
"Many are saying that we should develop blockchain technology even though we restrict Bitcoin transactions," the source said. "But it is simply impossible because the two are very closely associated.
"I am worried that I may lose clients due to the restrictions. They would also be bad news for Korea because the country would lag behind in global competition for the potential-loaded businesses."
