The head of Korea’s leading blockchain association has publicly stated that government should allow ICOs for economic growth of the country.
“Put Regulations in Place,” Says Blockchain Champion
Chin Dae-je, the chairman of the Korea Blockchain Association, has urged the government to roll back the ban on ICOs (Initial Coin Offerings), arguing that doing so will help create more jobs and boost economic growth. He made these remarks while speaking at a blockchain conference at COEX in Gangnam district, southern Seoul in late September. Chin has previously served as the minister of Information and Communication and as the head of Samsung’s media division.
Speaking at the conference, Chin said:
The government should implement guidelines to nurture the domestic blockchain industry, which will help Korea emerge as a global industry leader.
The Korean government last year imposed a ban on ICOs, citing safeguarding the interest of investors as the reason behind the move. However, the citizens are free to participate in ICOs being launched from other venues. The action has caused a lot of start-up entrepreneurs to set up their businesses in neighboring countries like Japan, Hong Kong, Singapore, Philippines, and Thailand.
Presenting proposed guidelines prepared by his association Chin added, “Start-ups who comply with guidelines should be allowed to launch ICOs.”
He further stated:
By regulating and allowing ICOs, we can nurture start-ups with high potential, create jobs and reduce youth unemployment. […] We can designate public or private organizations like the Korean Blockchain Association to look over the ICO white papers and verify the purpose of their fundraising.
The Preferred ICO Destinations
ICOs have become a popular method among blockchain start-ups for raising funds for their projects. Projects issue native tokens in exchange for the funds collected in either Bitcoins or Ethereum. The native coins can either be used on the project’s platform post-launch or traded on the cryptocurrency exchanges.
Last year, investors made good gains from the rise in prices of the ICO tokens. However, this year, while more money has been raised through ICOs, most tokens are currently trading below their launch price.
Venues like Switzerland, Singapore, Malta, Gibraltar, Estonia, and Dubai have emerged as favorite destinations to launch ICOs due to their crypto-friendly regulations.
Many blockchain supporters in Korea feel that the country may miss out on the potential opportunity of growth that exists by taking a hostile approach towards blockchain and cryptocurrencies.
The Chairman Bats for Crypto Exchanges
Chin also urged the government to make it easier for exchanges to be able to issue new user accounts for deposits and withdrawals in Won, the local fiat currency. In January of this year, the country’s financial regulator – Financial Services Commission – pushed the exchanges to strengthen the customer verification process.
Addressing the issue, Chin stated:
The government should allow currency exchanges that verify customer identity and have appropriate security measures to be allowed to issue new virtual accounts. […] Korean exchanges that were ranked as the fourth or sixth-largest in the world before are dropping to below 20th place now.
He also noted:
If domestic currency exchanges disappear, it will be more difficult and financially challenging for Korean start-ups to issue ICOs as they would have to list their coins on non-Korean exchanges.
As pro-crypto voices get louder, the government now seems eager to soften its hard-line stance on digital currencies. It is expected that the ban would be reversed either by the year-end or by mid-2019.
Do you agree that countries that are taking a hard-line position and banning cryptocurrencies and ICOs are missing out on a big opportunity for economic growth? Let us know in the comments below.
Images courtesy of YONHAP, Shutterstock