South Korea is considering shutting down domestic virtual currency exchanges, with policymakers criticising the concept, Reuters reported on Thursday.
Cryptocurrency exchanges allow customers to trade digital currencies for other assets or different digital currencies. They are largely unregulated currently.
“The government is considering both shutting down all local virtual currency exchanges or just the ones that have been violating the law,” South Korea’s chief of the Financial Services Commission said, while answering questions in Parliament.
Meanwhile, Bank of Korea Governor Lee Ju-yeol said cryptocurrency is “not a legal currency and is not being used as such as of now”.
Cryptocurrencies are digital or virtual currencies that use cryptography to secure and verify transactions. As their popularity grows, governments around the world are trying to come up with ways to regulate them.
In India, the government and the Reserve Bank of India warned users against virtual currencies. The government even compared them to ponzi schemes and warned traders of the risks, including “permanent loss of money”.
In 2017, the value of Bitcoin – the most popular cryptocurrency – had soared more than 1,700%. However, prices have sharply dropped since South Korea announced last week that it may ban domestic cryptocurrency exchanges. On Wednesday, Bitcoin slid 18%, according to Reuters.