January 8, 2024
By Sharan Kaur Phillora
In a global push to regulate the burgeoning cryptocurrency market, South Korea and China are tightening regulations, while Nigeria is adopting a more open approach.
Here’s what we know:
The Financial Services Commission (FSC) of South Korea has proposed a ban on credit card purchases of cryptocurrencies to curb illegal financial activities and money laundering. This move comes amidst broader efforts to clamp down on tax evasion, with recent actions like the seizure of $375,000 in crypto assets from tax evaders in Incheon city.
The FSC’s proposal is part of a sweeping effort to control speculative activities and illegal outflows of funds, especially in the context of digital assets. South Korean authorities diligently monitor the flow of funds, with the proposal open for public input until February 13. The crackdown is not limited to cryptocurrencies; it also targets hidden financial assets, evidenced by the significant amounts collected from tax evaders in recent years.
Meanwhile, China is taking a different approach by focusing on using cryptocurrencies in bribery. Recent discussions at the China Integrity and Legal Research Association meeting have highlighted the need for more robust legal frameworks to address these new forms of corruption. Chinese legal scholars are concerned about the increasing use of virtual currencies and electronic gift cards in corrupt practices, pointing out the challenges their anonymity and difficult traceability pose.
On the other hand, Nigeria is revising its stance on cryptocurrencies, representing a contrasting approach to South Korea and China. The Central Bank of Nigeria (CBN) now allows crypto exchanges and digital asset brokers to operate naira-denominated bank accounts with certain restrictions. This is a significant move away from the previous outright ban on cryptocurrencies. Moreover, Nigeria is actively working towards launching its first regulated stablecoin, cNGN, reflecting a forward-thinking attitude towards the potential of digital assets.
As each country responds to cryptocurrencies’ unique challenges and opportunities, the global landscape continues to evolve. South Korea and China’s strict regulations reflect their concerns over financial stability and corruption, while Nigeria’s more open stance indicates a willingness to explore the potential benefits of cryptocurrencies. The varying approaches underscore the complexity and diversity of global cryptocurrency regulation as nations seek to balance risk, innovation, and control in the digital age.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.