Prime Minister Lee Nak-yeon. [Yonhap Photo]
Digital currencies, including Bitcoins, have become a controversial issue in the world's financial industry this year. South Korea is no exception as it became a hotbed for speculative investments with the daily trading volume of Bitcoin surpassing that of China's in September.
South Korea's cryptocurrency trading market was very small last year, but it became the world's third-largest market in September with 65 billion won (60 million US dollars) in daily trading volume, according to data released by Coinhills, a cryptocurrency market index group.
About one million people are estimated to have the best-known digital currency in South Korea. There are no proper regulations because digital currencies are not recognized as financial products.
Because of rapidly-rising public interest and speculative investments in digital money, Seoul is concerned over excessive attention on cryptocurrencies. As of last week, South Korea's daily Bitcoin trading volume reached 305 billion won.
In a cabinet meeting on Tuesday, Prime Minister Lee Nak-yeon expressed worries that speculative investments in digital currencies are causing negative effects or distorted phenomenon.
Digital currency or cryptocurrency is a decentralized digital asset which is exchangeable between users through peer-to-peer transactions. The digital money market operates on a decentralized blockchain which means no central authority holds transaction records stored on the computer of every owner of a cryptocurrency.
Lee urged government bodies to look into the new social phenomenon, saying some young people invest in digital currencies or are involved in crimes to earn easy money.
The craze for Bitcoin hit South Korea's online community early this year when its value skyrocketed, attracting countless investors who were lured by some successful stories of earning big money through Bitcoin trading.
Financial Services Commission vice chairman Kim Yong-beom told a forum on Tuesday that measures should be worked out to prevent cryptocurrencies from being used as a tool for money laundering. "We will draw up thorough countermeasures that prevent cryptocurrencies, like bitcoin, from being a new channel for money laundering."
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