As cryptocurrencies soared toward the end of 2020, investors were taking special note of their performance in a few key markets. South Korea is one of them. In March 2020, the South Korean National Assembly passed new legislation that paved the way for the regulation and legalization of cryptocurrencies and crypto exchanges.
This action was taken in recognition of the burgeoning growing cryptocurrency ecosystem even in the midst of the COVID-19 epidemic. The legislation was designed to oversee an emerging industry and develop rules around anti-money laundering processes.
- Cryptocurrencies are popular investments among South Korea’s young generation who see them as a path to prosperity in a context of persistently high unemployment.
- South Korea has long been an early adopter of new technology, and the culture is such that people are quick to embrace new technological innovations and opportunities.
- Cryptocurrencies are stateless investments that appeal to South Korean investors wary of the political climate and their proximity to the threat posed by North Korea.
South Korean investors have been eager to invest in digital assets and cryptocurrency markets. According to 2021 survey data, 40.4% of 1,885 workers polled noted that they had invested in cryptocurrency. Remarkably, about 49.8% of South Korean workers aged 30 years to 39 years said they have invested in cryptocurrencies. Workers in their twenties followed with about 37.1%.
This data provides meaningful insight as to what appears to be South Korean investor acceptance of blockchain and cryptocurrencies. Embracing a positive outlook fueled the popularity of making investments into what many South Koreans consider the future of finance.
However, the excitement shared by South Korean digital asset investors has not come without consequence—as the excitement has attracted the attention of criminals and regulators alike. As a result, South Korea is in the midst of a cryptocurrency crackdown intended to improve exchange transparency, reduce criminal activities like money laundering, and help provide a layer of regulatory safety for crypto investors.
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