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South Korea Taking a Look at Implementing Bitlicense-Style System

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The South Korean regulators are thinking about the possibility of introducing an approval system for cryptocurrency exchanges.

The development was first reported in the publication, Business Korea.

An official taking part in the government’s virtual currency task force, which has been examining the subject said:

“We are positively considering the adoption of an exchange approval system as the additional regulation on cryptocurrencies. We are most likely to benchmark the model of the State of New York that gives a selective permission.”

The State of New York permits exchanges to xchange cryptocurrencies only in the event when they have acquired a charter or a license, known as Bitlicense, from the New York State Department of Financial Services (NYSDFS).

Its stringent controls and capital requirements have resulted in only 6 firms being given the green light so far. Circle Internet Financial, XRP II, Coinbase Inc, and Bitflyer USA have received Bitlicenses, while charters were granted to Gemini Trust Company and Itbit Trust Company.

When the country embraces the New York model, it would be able to bring cryptocurrencies into the institutional system as well as monitor the market in a systematic manner. The final decision will likely be made after local elections in June.

The Ministry of Strategy and Finance is aggressively planning to adopt the exchange approval systems.

At the end of January, the NYDFS asked cryptocurrency trading data from the South Korean regulators after two agencies inspected of 6 major South Korean banks.

The South Korean government started announcing regulatory measures for cryptocurrencies late last year. On December 15, bitcoin was trading at over USD$18,500, according to data from one of the country’s largest cryptocurrency exchanges by volume, Bithumb.

In an effort to reduce speculation, the Korean government took extreme measures, which included an outright ban of crypto trading and shutting down crypto exchanges.

Korean regulators believe that “there is no need to use a hard-line policy, including a total ban on trading, as the speculation has subdued.

The country’s prime minister verified at a National Assembly meeting that shutting down cryptocurrency exchanges is “not a serious consideration.”

Deputy Prime Minister and Minister of Strategy and Finance Kim Do-yeon also said:

“We don’t need to get rid of or suppress digital currencies.”

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