Cool heads neededThe government went forward with its clampdown on cryptocurrencies despite the uproar in one of the world’s biggest markets. The Financial Services Commission announced restrictions to bank accounting services connected to the virtual coin exchanges to anyone who refuses to confirm their real identity. Money cannot be transferred to bank accounts if the deposit holders do not disclose their identities within a certain period.
The government last month announced that cryptocurrency trade must be done with one’s real name. It wants to keep minors and foreign nationals away from the market and stock up data for future taxation. It also aims to track data on cryptocurrency trade and investors to come up with adequate policy in the future.
The government plans to draw up a taxation guideline on cryptocurrency transactions to include it in next year’s tax code. The temporary virtual accounts available by banks to help convenient money transfer for apartment maintenance bills and tuition fees often have been used for speculative and suspicious money deals because they cannot be easily tracked.
The petition on the Blue House website opposing regulations on cryptocurrency has drawn over 170,000 signatures. If the petition draws over 200,000 signatures, the Blue House will be forced to respond to it. It cannot take the uproar lightly as it comes mostly from people in their 20s and 30s, who make up the strongest voting base for Moon. But it can cause bigger confusion if it wavers.
The frenzy over virtual coins resembles the past craze over stocks in public entities like Posco. The privatization scheme to include the public was well intended. At the end of the day, however, farmers and other retailers lost money and the shares ended up in the hands of foreigners.
Authorities must cool the market with discretion to avoid popping the bubble too fast. Raising transparency and accountability in trade is the first move. In this process, speed will be essential.
Authorities must hasten bank transactions using real names to make the trade more responsible. Radical actions like banning trade or closing down exchanges can be discussed later after observing what happens overseas.
The government must deal with speculation strongly, and at the same time, must not get in the way as blockchain technology continues to advance.
JoongAng Ilbo, Jan. 15, Page 30