South Korean U-turn: Cryptocurrency Ban Is Unlikely In Long-Term

South Korean U-turn: Cryptocurrency Ban Is Unlikely In Long-Term

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After the South Korean justice minister caused “confusion and anger” last week by saying the government would ban cryptocurrency exchanges, local news media report, the latest statements from Seoul indicate a significant U-turn. The original plan has been for banks to stop issuing virtual accounts and install the new government-mandated, real-name identification system. From that point on, they would only issue real name accounts. This new system is expected to be introduced around January 20. The news outlet detailed:
“The country’s financial regulator has pushed banks to stop opening new accounts until they establish a way to verify that the accounts bear the real name of the customer, to prevent money laundering.”
According to The Korea Times, however, Shinban Bank said Jan. 12 it does not intend to introduce an identity verification service for deposits and withdrawals from virtual bank accounts – effectively ruling out the opening of new virtual accounts, even with identification. An official from Shinhan the Bank reportedly said:
"We've developed a system to introduce identifying virtual account customers in accordance with the government's efforts to curb the cryptocurrency craze. However, we decided to scrap the service enabling the trade of digital tokens which has become a serious social issue."
Previously, a spokesperson from the South Korean cryptocurrency task force stated that the country will follow the regulatory roadmap set by major regions like Japan and the US. Hence, it is highly unlikely that even in the long-term, a cryptocurrency trading ban will be imposed. The spokesperson said:
“The South Korean government has no other choice but to follow the regulatory frameworks and trends established by other leading governments. While there certainly exists a negative reputation attached to the cryptocurrencies, the government’s stance is to allow what has to be allowed, for the benefit of the South Korean market.”
  Is it a planned South Korean step to destabilize the cryptocurrency market? Let us know your opinion in the comments section below.  

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