In January of this year, the Central Bank of Korea (BoK) announced they were researching cryptocurrency impacts on the financial system by implementing digital money, including the idea of issuing a central bank password.
Now BoK has released its “2017 Payment Report”, which includes the official announcement of a Cash-Free Society pilot project study. A portion of the report states that BoK has been exploring the aforementioned blockchain technology and password security payment systems.
So far BoK’s study has proved positive and project goals were said to be increasing user convenience by eliminating physical paper and coin. It also shows the savings that could be attained by going cashless. According to the report, South Korea spent $47 million (USD) last year creating and issuing physical money.
BoK has eyed a cashless society for two years now and has made 2020 its target date for going completely “cash free”. Last year the bank began offering the ability for customers to have their change from purchases deposited into special smart cards that would hold that balance for them.
As of May 2, 2018, the South Korean government still hasn’t come to an agreement on how cryptocurrencies will be regulated. South Korea had one of the biggest runs on cryptocurrency in the public sector, more than any other East Asian nation in 2017. This surge in user interest in cryptocurrency came after the value of Bitcoin began climbing.
In January of this year the Ministry of Justice decreed that cryptocurrency trading would be banned, however, that decision was quickly overturned in February by the Minister of the Office for Government Policy Coordination. The sudden change came after numerous cryptocurrency exchanges petitioned and made legal threats.
While old school financial institutions have always looked to or expected government authority to be the deciding factor on trading rules and regulations, it seems that the 21st century political theory of laissez faire is a much better plan of action in regards to the cryptosphere, at least in South Korea. So, while the government couldn’t come to any conclusion on how to regulate the industry, the exchanges themselves took it upon themselves to fix the matter. In fact, 14 South Korean exchanges came together just two weeks ago and drafted a complete set of guidelines to show transparency and to prevent criminal activity such as money laundering.