After months of toing and froing, South Korea has now made the decision to start to regulate Bitcoin. The Far East country will now treat the cryptocurrency as a commodity, rather than a currency.
The governor of the Central Banks of Korea, Lee Joo-yeol, recently made the announcement and made it clear that âRegulation is appropriate because it is regarded as a commodity. It [cannot be] regulated at the level of a currency.â They have come to this decision based on the definition of the BIS (Bank of International Settlements).
This regulation is not due to come into force anytime soon, but the announcement is very encouraging nonetheless. It seems the South Korean government has not taken this decision lightly, as a task force was actually first established back in 2016 to study the licensing and regulatory parameters for Bitcoin exchanges. Their decision has had numerous setbacks along the way. As recently as June 2017, CNN reported that this task force had failed to come to a decision as to whether it is the right time to include cryptocurrencies in their system and whether it would even be possible.
This news comes not long after the Financial Supervisory Service, which acts as South Koreaâs financial regulator, announced that ICOs (Initial Coin Offerings) were to be banned. This ban was also exercised by the Chinese government who, specialists believe, are currently in the process of drawing up their own legislation for cryptocurrencies to be used in China. The decision to ban ICOs in South Korea came as a suggestion from the task force who believed that they pose a threat to investors who could be defrauded of their money.
It is unclear as of yet exactly when this new regulation towards Bitcoin will come into effect.