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Why South Korea’s Bitcoin adoption might turn the volume tables this year

‘2017’ saw a monumental shift in terms of Bitcoin volumes, where growing cryptocurrency adoption has risen significantly over the past year. The opportunity to recognize their contribution to the Bitcoin volumes and their growing adoption was provided when Chinese Exchanges started imposing transaction fees on their trades. The volumes dwindled significantly and the Exchanges’ decision to ban withdrawals came as the final nail in the coffin. While things were looking rough for Bitcoin, other Asian countries stepped up with unbelievable adoption levels and supported the currency prices. While Japan has been the fore-runner, another country that went unnoticed in this bid would be South Korea. Let’s delve deep into Korea’s Bitcoin story:

The remittance market:


The remittance game has been strong with South East Asian countries as they capture 60% of the remittance market in the world. The South Korea-Philippines corridor hosts remittances startups that bank on Bitcoin to make the transfer. This has earned the startups a popular nickname called ‘Rebittance startups’, whose number has been increasing significantly in South East Asia. Most of the startups aren’t even present in the country but make rebittances possible over messaging apps like Facebook messenger and Viber. The Korea-Philippines corridor covers 20% of South East Asian remittances and are cheap when compared with Western Union or other traditional cross border transfer methods.

The efforts of Korbit:

Korbit is the first South Korean Bitcoin exchange that has worked relentlessly for mainstream adoption of the cryptocurrency. The exchange has 33,500 registered Bitcoin users with and is one of the top two exchanges by volume. The exchange offers a unique service called ‘Hyphen’ where businesses can send payments to any bank account in over 30 countries globally using Bitcoin. South Korea is the hub of tech startups that have revolutionized payments sector and fintech. Hence Bitcoin adoption hasn’t picked up significantly in the past but thanks to the efforts of Korbit, things are changing now quickly.

The regulations framework:


The Korean government has been very cooperative when it comes to Bitcoin and other cryptocurrencies. The Financial services committee has been considering to launch a cryptocurrency of the state that would facilitate transactions and strengthen the Fintech network. They are planning to propose a regulatory framework for Bitcoin based businesses in 2017 and monitor the currency’s movements in and out of the country. For a country with an annual remittance measure of $6.7 Billion, Bitcoin with encouraging regulations in place would be a good catalyst for growth.


South Korea planning to launch its own digital currency over blockchain?

South Korea is one of the fore runners when it comes to technology and its applications. The country enjoys a rich technological heritage with well-regulated and generous venture capital backing. Owing to this favorable set-up, South Korea has become the home for diverse tech startups that have gone on to become market giants across the globe. Even in the case of cryptocurrencies and Blockchain, all these observations are consistent. After achieving superior levels of expertise in digital assets and blockchain, the authorities are now planning to launch a national digital currency. While this move certainly is gutsy, let’s look into whether South Korea is actually prepared enough to handle it:

History of Cryptocurrencies:

When it came to cryptocurrencies, South Korea has always kept an open mind and has been liberal about the proceedings. Right from 2010, there has been liberal regulation of Bitcoin and startups based on the cryptocurrency evolved effortlessly. The transition from traditional finance to evolved Fintech happened with little friction. Even Public fund managers were able to incorporate Bitcoin indicating the kind of regard Bitcoin has been enjoying.


Out of one such instance, came the first ever Exchange traded fund (ETF) of Bitcoin across the world. While in USA, Winklevoss brothers are finding it difficult to get their ETF approved, Korea was able to launch it. The Korea Exchange, official exchange of South Korea would be hosting this ETF along with other products it offers.

Merchant Adoption:

The merchant adoption in the country is rising and is evident in the way the exchanges have launched adoption schemes. Since 2014, Coinplug has been building Bitcoin infrastructure in Korea with over 7,000 ATM machines. They have introduced okBitcard, which allows buying Bitcoins instantly over the counter. This facility is available at over 24,000 convenience stores.

korbit-logo-blue-background-02  coinplug

Apart from Coinplug, Korbit has a very strong presence in Korea with over 10,000 ATM machines and 50 banking institutions. These banking institutions can receive remittances from bitcoin senders. The service provided by Korbit for these payments, ‘BitWire’,  received good response.

Setting up the currency:

At 12th annual FinTech Demo Day in Seoul, the chairman of South Korea’s Financial Services Commission (FSC), Yim Jong-yong, announced his department’s plans to lay groundwork for spread of digital currency.  The FSC did not reveal any details as to what form or technology the digital currency will use. The government and the local financial industry players will launch pilot projects this year with Blockchain. The work would involve setting up new National cryptocurrency on the framework of Blockchain.

The department is offering three trillion won ($2.65 Billion) in funding over the next three years, to financially support the development of the fintech sector in South Korea.