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South Korea and Cryptocurrencies South Korea is known as one of the technology and electronics capitals of the world. It boasts global home grown companies such as Samsung, LG and Hyundai. They also have one of the highest adoption of mobile payments. It is no wonder that South Koreans welcomed cryptocurrencies with open arms. South […]

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South Korea and Cryptocurrencies

South Korea is known as one of the technology and electronics capitals of the world. It boasts global home grown companies such as Samsung, LG and Hyundai. They also have one of the highest adoption of mobile payments. It is no wonder that South Koreans welcomed cryptocurrencies with open arms. South Korea has played an ever increasing role in the adoption of Bitcoin and other cryptocurrencies. It has consistently been in the top 5 when it comes to Bitcoin trading volume. In 2017, demand for Bitcoin was so high that prices of Bitcoin there were 10-20% higher than in other markets and was dubbed the “kimchi premium”. There are also a few homegrown cryptocurrency exchanges such as Bithumb and Upbit, that although serve just the Korean market, have been consistently one of the top cryptocurrency exchanges when it comes to volume turnover.

Like many countries, Bitcoin is still not yet recognized as a legal tender in South Korea. As for taxation, Bitcoin and cryptocurrencies aren’t taxed yet since they are not considered currencies nor financial assets. Only those that are listed on the currency tax code can be taxed and cryptocurrencies are not yet in the list. However, South Korea’s ministry of Strategy and Finance has already begun plans to implement a taxation scheme for Bitcoin and other cryptocurrencies.

With such a demand, there are also a lot of cryptocurrency exchanges in South Korea. There are currently over 50+ different exchanges although the more prominent ones are only a handful. In 2018, there was a rumored ban which never materialized. Although cryptocurrency exchanges are legal and allowed to operate, users are strictly required to do KYC. Local financial institutions and government institutions are also banned from trading. Cryptocurrency exchanges in South korea are currently being overseen by the South Korean Financial Supervisory Services.

Crypto Regulations in South Korea

South Korea recently passed a bill to regulate Bitcoin and other cryptocurrencies in line with FATF (Financial Action Task Force) Standards. FATF is a global initiative to fight against money laundering and other financial related crimes. This means that crypto service providers in South Korea will be required to use the real-name verification systems. They will also need to comply with reporting requirements in line with the global cryptocurrency standards set by the FATF. Once it is approved by the president, it will take into effect after one year with a six month grace period for companies to comply. This means that current providers have until September 2021 to be in full compliance or risk violations.

The real-name verification system was initially introduced back in January 2018 but was not required. Crypto exchanges in South Korea were encouraged to partner with approved banks to use the system. Some of the largest exchanges operating in South Korea such as Bithumb, Upbit, Coinone, and Korbit have already been able to implement this system with partner local banks. The real-name verification system prevents money laundering since users will have to link their bank account through which they can deposit or withdraw fiat currencies.

Buying Bitcoin and Cryptocurrencies in South Korea

With several cryptocurrency exchanges already partnered up with traditional banks, buying Bitcoin and other cryptocurrencies directly with fiat is an easy task for South koreans. They simply need to transfer fiat money into their cryptocurrency exchange accounts and they can buy Bitcoin directly since most of these Korean exchanges have KRW/BTC pairs. You can refer to our cryptocurrency exchange guides to see the differences among the different exchanges when it comes to different criteria such as transaction fees, security, verification requirements, and payment methods.

Bitcoin ATMs are also another option to get your hands on Bitcoin and other major cryptocurrencies. Coinplug, a blockchain technology company, which holds the most number of blockchain related patents in South Korea, has partnered with one of South Korea’s leading ATM producers. This partnership brought online over 7,000 ATMs nationwide to offer Bitcoin. Users can purchase it using their credit cards. With this, ATM machines in convenience stores have become a gateway for people to easily access Bitcoin and other cryptocurrencies.

Top South Korean Cryptocurrency Projects

Kakao is one of the largest tech companies in South Korea. It owns the most used messenger service with millions of users. It has also continuously been investing in blockchain and cryptocurrency related startups. They recently launched their own global public blockchain called Klaytn. It aims to bring its enterprise-grade, service-centric and user-friendly blockchain platform to its millions of users. It already has the support of some of the top companies globally such as LG electronics and Binance.

Another blockchain project that has garnered support from top South Korean companies is Mil.k Alliance. It’s a blockchain based lifestyle point integration platform where users can gather and use reward points. Some of the companies that are part of this alliance includes Shinsegae Duty Free and Yanolja, one of the fastest growing travel companies in South Korea.

Spending Bitcoin in South Korea

With Bitcoin and cryptocurrencies slowly entering the mainstream in this tech savvy country, merchants are taking advantage and offering Bitcoin and other cryptocurrencies as a payment method. Coinmap reveals dozens of places you can use your Bitcoin to buy everyday goods and services. CoinMap South Korea

One of the largest underground shopping malls in South Korea called “Goto Mall” has recently partnered with a cryptocurrency exchange allowing its 620 stores to accept Bitcoin as a form of payment. Goto Mall receives more than 500,000 visitors daily. This is a good sign for adoption in South Korea. Stores ranging from home decor to flower shops can now accept Bitcoin.

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