China and South Korea further discuss cryptocurrency policy

South Korea's Minister of Strategy and Finance met with the Governor of the People's Bank of China to discuss and share economic policies, including cryptocurrency countermeasures. While China has implemented strict regulations on cryptocurrency trading, including closing cryptocurrency exchanges, South Korea's regulations are relatively lax.

South Korea and China discuss cryptocurrency regulation policy

Last Friday, South Korean Finance Minister Kim Dong-yeon met with People’s Bank of China Governor Zhou Xiaochuan. While discussing economic issues in both countries, regulators from both countries also discussed cryptocurrency regulation policies.

China has already implemented a ban that includes shutting down domestic cryptocurrency exchanges. However, South Korea has been releasing countermeasures against cryptocurrencies since December. The South Korean government has considered various measures, from a full ban proposed by the Ministry of Justice to a softening of regulatory attitudes. At the end of last month, South Korean regulators required all cryptocurrency exchanges to implement a new real-name account system. South Korea's NEWSIS news network quoted Kim Dong-yeon as saying:

On recent issues related to virtual currencies, the two sides exchanged views on the situation and policies of the two countries.

According to a report by Asia Today in Korea, at the meeting, the People's Bank of China reaffirmed its close cooperation with the South Korean government on this issue. The South Korean side also stated that it will continue to cooperate with the People's Bank of China through high-level consultation channels.

South Korea avoids closing exchanges

While the South Korean government has repeatedly stressed the importance of curbing the overheated cryptocurrency market through strict measures, it has so far not taken action to shut down cryptocurrency exchanges.

According to South Korea’s YTN TV, Kim Dong-yeon pointed out at the National Assembly Planning and Finance Committee meeting last Wednesday that if cryptocurrency exchanges are closed, there may be problems with underground transactions and foreign exchange outflows. South Korean media Money Today quoted Kim Dong-yeon’s speech:

The government has no intention to ban or restrict virtual currencies… Because virtual currency trading facilities (exchanges) regulated by the E-Commerce Act are now the biggest issue, I am discussing this urgent matter with the government’s (cryptocurrency) task force.

In South Korea, cryptocurrency exchanges are not financial entities, they fall under e-commerce law. Kim noted that this is not the case in Japan, where they need to register with the Financial Services Agency.

Kim's meeting with the governor of the People's Bank of China came after the South Korean government announced in early January that it would work with China and Japan to address speculation in the cryptocurrency market. In addition, Kim Yong-nam, vice chairman of the Financial Services Commission (FSC) of South Korea, also called on 23 other countries and 12 organizations, including the International Monetary Fund and the European Union, to work together to curb cryptocurrency trading.

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