Cryptocurrencies are expanding every single day more and more in any single country. And this is something that governments know very well. Kim Yong-jin, South Korea’s Deputy Minister of Strategy and Finance, commented that the cryptocurrency market could threaten the traditional fiat system.
Can Cryptos Win Against Fiat?
Every single crypto enthusiast dreams of living in a world without fiat currencies but just cryptocurrencies for daily transactions. But it seems far away from being a reality, at least now. But Mr Kim believes that the current fiat system could be at stake with the increasing interest in virtual currencies.
During a financial conference at InterContinental Seoul, minister Kim said:
“Cryptocurrencies like Bitcoin and Ethereum, which led an investment and speculative bubble earlier this year, have stabilized and are leading both the authorities and investors to question the foundation of the fiat system. The central bank should consider the emergence of alternative payment methods such as cryptocurrencies as a threat to the existence of the traditional fiat system.”
It is important to mention that virtual currencies have been strongly regulated in the Asian country. In the past, different measures have been implemented in order to protect customers, investors and traders. Moreover, the government has banned all the ICOs from operating in the country in September 2017.
But during the last weeks, some reports explained that the South Korean government may consider to lift the ban on ICOs in the near future. The truth is that some companies are deciding to move abroad in order to expand their business and run Initial Coin Offerings. We can mention Bithumb and Kakao, two important crypto-related businesses.
An anonymous source explained to the Korea Times, that the country’s financial authorities would eventually lift the ban on ICOs once some regulatory requirements are met.
The source commented about that:
“The financial authorities have been talking to the country’s tax agency, justice ministry and other relevant government offices about a plan to allow ICOs in Korea when certain conditions are met.”
Mr Kim has the right to be worried about the future of fiat currencies. Cryptocurrency exchanges are showing higher revenues than banks. For example, Deutsche Bank recorded a profit of $146 million in 2018 Q1, as CNBC and Reuters reported.
But the impressive thing here is that one of the most important cryptocurrency exchanges, Binance, registered a profit of $200 million in 2018 Q1.