Why is South China on bitcoin suddenly terrified of bitcoin? Bitcoin’s value has fluctuated wildly in the past few months.
South Korea, one of the most technologically innovative societies, is now not only giving up its role as a leader in the field but aggressively fighting the trend. But leaders point to other concerns as well. South Korea’s Ministry of Justice said on Thursday the country is considering shutting down all local cryptocurrency exchanges, an announcement that sent shockwaves through the industry worldwide. Earlier this week, stock in the internet service provider Pareteum more than doubled after it said it would provide blockchain support services, Bloomberg reported, but fell 25 per cent after Seoul’s comments. After Hong’s announcement, bitcoin prices at the Korean cryptocurrency exchange Bithub fell 13.
Two of Korea’s largest banks, Shinhan and KB Kookmin, announced this week that in mid-January they will no longer redeem credit card points for bitcoin, according to a report by Korea Biz Wire. This comes after South Korean officials reportedly banned the trade of bitcoin futures in December and drafted emergency measures prohibiting minors, foreigners and banks from bitcoin trading. One cause for concern is that bitcoin has grown in value more than 12 times since January and remains prone to extreme volatility. Don’t panic: why Chinese stocks will continue to rise Despite the fluctuations, retail investors and several major Korean companies are getting in on the action. But if Korea moves ahead with a full shut down, it would not only end these projects but also make bitcoin less attractive in neighbouring Asian nations, possibly triggering a domino effect. Bitcoin, the world’s largest cryptocurrency, has an underlying technology that makes it an unhackable commodity that doesn’t need a central bank or a government to guarantee its value. This allows users to make transactions without an intermediary, saving time and money, potentially upending the costly financial services and exchange markets as we know it.
Why bitcoin fever is a bubble waiting to burst Korea is the third-largest market for bitcoin trading after Japan and the United States, making up roughly 20 per cent of all bitcoin trading, and the country’s recent change of heart comes amid other nations also placing restrictions on the cryptocurrency. On December 25, the Israeli Securities Agency announced companies will no longer be able to trade in bitcoin on the Tel Aviv stock exchange, and in Morocco, Bolivia and Ecuador, bitcoin is completely illegal. Concerns seem most profound across Asia, however, where bitcoin is also illegal in Kyrgyzstan, Bangladesh and Nepal. September and began to crack down on exchanges.
There are, of course, legitimate concerns about fraud. The incident gave authorities a reason for more regulations, but some worry they would really be a form of protectionism. Korea has struggled with the acceptance of new technologies that infringe on some of the major vested interests and we suspect that bitcoin will be no different. What makes South Korea’s situation different, however, is the existential threat posed by North Korea. Youbit went out of business in December after being hacked, losing one-fifth of its clients’ holdings. The company did not say how much was taken, or how it happened, but Pyongyang is a leading suspect. North Korean hackers are also believed to be behind the attacks on four South Korean bitcoin exchanges this past summer.