SEOUL – South Korea’s Finance Minister Kim Dong-yeon said on Friday that it will be necessary to hold more consultations before banning cryptocurrency exchanges.
The announcement by the minister came a day after Justice Minister Park Sang-ki said the Justice Ministry was preparing a bill to ban cryptocurrency trading through exchanges, which caused the price of Bitcoin to plummet more than 10 percent.
“The issue of shutting down (cryptocurrency) exchanges, told by the justice minister yesterday, is a proposal by the justice ministry and it needs consultations among ministries,” said Kim Dong-yeon in statements reported by South Korea’s Yonhap agency.
The price of Bitcoin fell on Thursday by as much as 14 percent on the United States platform Bitstamp, reaching $12,800 during its trading hours in Asia, while the price fall was limited to 12.47 percent on the website CoinMarketCap.
Although approving the bill could take months, the announcement threw the virtual currency market into turmoil and prompted over 50,000 South Koreans to sign a petition asking the government to change its decision.
After the finance minister’s statement, Bitcoin recovered slightly on Friday to rise over 3 percent to reach $13,749, according to the data of the website, Coindesk.
The spectacular surge in Bitcoin’s value in 2017, of around 1,500 percent, has fueled the demand for cryptocurrencies in South Korea, where, according to the latest polls, one out of 10 citizens have invested in this type of asset, giving rise to fears that this might trigger their use for criminal activities.
The South Korean government is aiming to toughen the regulation of cryptocurrencies and, in September, it banned initial coin offerings for all cryptocurrencies to prevent the formation of an asset bubble in the Asian country.
Cryptocurrencies have become a popular form of payment in Japan and South Korea, and also a way to deposit savings amid low returns from other investment assets.