Among the many nations around the world, Korea has one of the greatest potentials to be a country powered by cryptocurrency. Due to the high connectivity within the country, the infrastructure of the government and the economy, blockchain can fit in well. If anything, South Korea is one country in the world that has the potential to be the pioneer of a crypto-powered nation.
If this does happen, we will see this materialize in the form part mainstream adoption of cryptocurrency, a hub for blockchain innovation and the running of scalable blockchain infrastructure. Another important factor in enabling the growth is the government will have a good relationship with the cryptocurrency community to support their growth.
Over the next few years, South Korea could be a place that is worth watching. Here are a few reasons why we believe that this country is going to be the next crypto nation.
1. A lot of Koreans know about cryptocurrency
At the moment, it is reported that nearly 30% of the adult population in Korea owns cryptocurrencies. It is even more prevalent among millennials compared to any other generation. Therefore, the idea of owning a cryptocurrency in Korea is not boring. Although so, it can be seen that the growth in the price of Bitcoin was fuelled by a lot of speculation. In Korea, the prices of Bitcoin peaked by nearly 40 percent more compared to foreign exchanges. Surprisingly, Korean traders are willing to pay the premium even if the prices were higher compared to other exchanges. A positive impact of this is that Korea has managed to build a cryptocurrency infrastructure that can handle a large number of customers.
Almost everyone in the country has heard of the term cryptocurrency. This is an important hurdle that Korea has managed to overcome as it has increased awareness of cryptocurrencies. That said, Korea has the third largest cryptocurrency market in the world. It is important that the citizens of Korean know that the technology exists for them to become a crypto nation. Without widespread awareness, it is going to be impossible for South Korea to implement these changes.
2. The government seems to favor cryptocurrencies
The South Korean government has had a rocky relationship with initial coin offerings. Depending on government regulations, it can affect the way that cryptocurrency is traded domestically. Currently, the Korean government is still uncertain in their stance for cryptocurrencies. However, many Korean crypto insiders remain optimistic of the situation with the government.
The current president of South Korea, President Moon Jae, relies on the support of the young adult population. In fact, these people were the reason that he came into power. He acknowledges the fact that most millennials are interested in trading cryptocurrencies. Therefore, Koreans are more willing to take chances with their investments compared to the older generation who are more conscious.
The President is expected to have a favorable stance toward cryptocurrency because the government currently needs the young people’s support for him to remain in power. To do that, the government needs to support what young people like, which is cryptocurrencies.
3. Improved innovation within the cryptocurrency space
There are two reasons why Koreans have an increased awareness of cryptocurrencies. Firstly, the Korean cryptocurrency market is utilized to get money out of China. This is because China has effectively banned the trading of cryptocurrencies within their borders. Therefore, many Chinese investors are moving to Korean exchanges to trade there. However, there is evidence of market manipulation by these Chinese investors.
Although there is no limit on the amount of money that Chinese citizens are allowed to export, they seem to be one step ahead of the system. These Chinese investors buy Korean businesses and use this platform to move their money. Another factor is the North Korean embargo factor. Recently, the Trump administration has imposed sanctions on North Korea. As a result, the cryptocurrency space is used to channel money which cannot be tracked by the American authorities. Additionally, reports are stating that North Korea may be mining cryptocurrencies and are trying to steal them from South Korean exchanges.
In South Korea exchanges, there is an increase in the cryptocurrency activity, and they are forced to innovate on their security and scaling solutions. The South Korean government is driven by the fact that there are money laundering and cyber attacks happening on the infrastructure. As a result, they are forced to innovate, but they believe that this will benefit them in the end.
4. The cryptocurrency space is growing
Metaps+ is a digital couponing company that has completed their Korean initial coin offerings in 2017. So far, there have only been five initial coin offerings in Korea. However, there have been a lot of activities relating to cryptocurrencies happening within Korea. In fact, a recent cryptocurrency conference in Seoul has attracted 1,000 attendees. Although the numbers may not be huge it shows that there is an interest in the space within Korea.
On top of that, the massive growth in Korea is supported by the country’s high degree of connectivity. Everywhere in Korea, it is easy to find a Wi-Fi connection. Nearly 70% of South Koreans have a smartphone, which is the fourth highest rate in the world. As a result, it is not surprising that Japanese companies use Korea as a testing ground for the games.
On top of that, the Korean education system has encouraged the production of high-quality engineering talents that can provide innovative blockchain solutions. They also excel in math and science courses. Most of their citizens are educated with a bachelor degree and the top educational institutions are also in South Korea.
In cryptocurrency, it is essential to encourage the growth of human capital that can develop the growth of the space. We can safely say that Korean investors are over the initial hype that has been going on with cryptocurrencies. Now, they are looking toward building a future on cryptocurrencies. Therefore, they are researching how cryptocurrency assets can be deployed on a national scale. This country also has a culture of achievement and has an increasingly global outlook. If you combine this, there is a huge possibility for a crypto nation to occur.
What could be possible for Korea?
It may be difficult to imagine what a cryptocurrency nation will look like. It’s simply because we don’t have one yet. However, South Korea portrays some of the prerequisites that are required for a crypto-powered nation. It has a high level of connectivity, a high level of awareness, and support from the government. Moreover, Korea also has an education system that supports the creation of high-quality engineering talent that will support the growth of blockchain.
Therefore, this will create a competitive environment so that no corporation can gain dominance in this industry. As there is a more talented individual in the blockchain space, they will continue to challenge the power play within the industry. It will be interesting to see where Korea is headed in their journey with cryptocurrencies. At the moment, they are busy trying to figure out how to protect their exchanges from attacks from North Korea.