Do not go gentle into that good night, old age should burn and rave at close of day; Rage, rage against the dying of the light, though wise men at their end know dark is right, because their words had forked no lightning they, do not go gentle into that good night.
INTERVIEW Republic CEO optimistic about cryptocurrencies
Kendrick Nguyen, CEO of crowdfunding platform Republic, speaks during an interview with The Korea Times, Tuesday. / Korea Times photo by Choi Won-suk
By Jhoo Dong-chan
By Jhoo Dong-chan
Christmas is almost here, but there is no time to sing carols for crypto investors as prices of most virtual coins have undergone wild fluctuations over the past month.
Bitcoin prices dipped below $3,500 per coin Nov. 26, only a week after the price plunged below the $5,000 mark, Nov. 20. It was the worst month in 68 months for the world's most widely used cryptocurrency since it fell 44.8 percent in April 2013.
It was also down 81 percent from its heyday when it reached its peak at near $20,000 in December 2017. Other major virtual coins such as Ripple, Ethereum and EOS have joined the downtrend, but crowdfunding platform Republic founder and CEO Kendrick Nguyen maintains his optimism about the future course of the industry.
“It's only passing a correction period,” Nguyen said during an interview with The Korea Times.
“The recent development regarding cryptocurrencies was very disappointing. I believe, however, it was in a period of transition where investment capital flows were replacing speculative capital flows. The inflows were still limited so we saw the bearish trend because of weak investor confidence in November, but virtual coin prices will bounce back anytime as soon as people see a tangible case of a cryptocurrency used practically in our everyday life.”
Despite the market crash, the U.S. state of Ohio has recently decided to accept bitcoin for 23 different business taxes ranging from sales tax to severance taxes on oil and gas.
The state of Ohio said it is accepting one cryptocurrency, bitcoin, and payments are limited to businesses for now. Individuals cannot pay their taxes with bitcoins yet.
“Such efforts to utilize crypto and related technologies in our everyday life will expand further into a wider range of our everyday life,” said Nguyen.
“Especially, Korea features an ideal environment to incubate blockchain and related technologies. Korean firms are also one of the most active players in the global crypto industry. I understand the financial regulator is still working on how to adopt related technologies, but there is no doubt the country will eventually accommodate it soon or later.”
The industry had become the centerpiece of Korea's financial market when bitcoin peaked at over 25 million won ($232,666) per coin in January. Following a series of government announcements planning to regulate the market since late January, however, bitcoin prices plunged below 8 million won in the next month.
Critics claim such regulations have driven domestic firms to choose more favorable countries, such as Switzerland and Singapore, for their initial coin offerings (ICOs), but Nguyen said it takes time for financial regulators to adopt a new technology, such as virtual coin and blockchain technology.
“Regulations and laws are always a step behind the pace of technology advancement. It takes time for the financial authorities to find a proper tool to oversee technologies,” he said.
“As for a financial regulator, it always needs to find a sweet spot between protecting investor rights and promoting businesses. If the financial regulator places a greater emphasis on investor rights, it could discourage firms' entrepreneurship. On the other hand, if it poses a laissez-faire approach to the market, some firms could attempt to deceive investors to secure profits. It's a difficult job, but the financial regulator will eventually find its stance in between the two sides.”
This wasn't the first time for Nguyen to visit Korea. He participated in a local blockchain conference and met industry insiders in Korea.
“I understand there are a number of startups in Korea featuring a new type of technology. In many cases, like in the U.S., they experience difficulties because of lack of funds,” Nguyen said.
“In May 2016, the U.S. Securities and Exchange Commission (SEC) enacted Title III of the JOBS Act, allowing non-accredited investors ― the majority of the U.S. population ― to invest in startups. But legal requirements are still too complicated. This is why we introduced Republic. It will give opportunities to investors, including small investors, to invest in companies they believe in.”
According to crypto observer coinmarketcap.com, a total of 2,073 virtual coins have so far been introduced, and the net market cap stood at $130 billion as of Dec. 3.