It’s been a busy (and not terribly positive) week for cryptocurrencies in Asia.
First, South Korea, one of the busiest hubs for the trading of cryptocurrencies, made the unexpected announcement that the government is exploring plans to ban trading of the currency on exchanges—and then made clear that officials are looking for greater coordination (and not of the deregulatory variety). Specifically, the vice chairman of the South Korean Financial Supervisory Commission (FSC) has declared:
As the international financial risks related to virtual currency increase, the financial authorities need to pay close attention to this…In particular, virtual currency, which is outside the traditional regulatory domain of financial authorities, is affecting consumers.
This all of course largely coincides with efforts in China to rein in bitcoin even further—notably by prohibiting the mining of the virtual currency.
Finally, there is some hint that Japan could end up coordinating with China and South Korea in providing regional oversight of crypto-transactions.
I’m not sure what it all means, but there has always been a sense that regulators in Asia (with the notable exception of China) have been comparatively more patient with the speculative frenzy driving the currency. But with comparatively smaller capital markets than the US and UK, and with more exposure and risks for local retail investors, the region’s regulatory posture may begin to drift towards one more closely in line with that of the West. That is, however, mere speculation (couldn’t help the pun) on my end.