For a country to be described as being crypto-powered it would need to have recorded a massive adoption of digital currencies, possess scalable blockchain infrastructure that is enterprise-grade, and be recognized as a crypto-innovation hotspot across the globe.
Additionally such a country must have a crypto-sector that enjoys a balanced relationship with the government. One of the countries that would currently tick most of the above boxes is South Korea.
By some estimates the digital currency ownership among the adult population in South Korea is 33% meaning that the concept of ownership of digital assets is already mainstream in the Asian country. Much of the initial interest in virtual currencies in the country was driven by pure speculative greed with prices at some point being close to 40% higher in South Korean exchanges compared to foreign ones.
High penetration rate
The country also boasts of a high penetration of crypto-infrastructure and which has the capacity to handle a big number of consumers. Awareness of digital currencies is also high with most people in South Korea having head about them. Overall the Asian country is the third largest virtual currency market in the world.
Though the regulatory environment with regards to virtual currencies in South Korea has not been very clear in the past, there is general optimism that balanced regulation will be the case. The political base of the current administration of President Moon Jae-in is young adults. This demographic happens to be the one that is most invested in digital currencies. Part of the reason is because the millenials of South Korea have come of age when there is relative prosperity and can thus afford to take greater risks with their investments compared to older generations.
North Korea and China
Some of the reasons that are driving the advanced understanding of virtual currencies in South Korea include the fact that the country’s digital currency markets are being used as vehicles by the Chinese to get money out of their country. Additionally the sanctions that have been imposed on North Korea have also assisted in driving innovation at service providers and exchanges.
In China the citizens are not allowed to send out of the country amounts exceeding $15,400. To get around this Chinese businesses have allegedly been acquiring Korean businesses with a view to using them to move money around.
Mining and aid
With regards to sanctions imposed on North Korea there is speculation that the embargoed country is getting aid in the form of virtual currencies as this is impossible to track. There is also speculation that the North is undertaking the mining of virtual currencies. It has also been suggested that North Korea is involved in hacking and stealing virtual currencies from exchanges around the world.
This has resulted in South Korean exchanges such as Bithumb experiencing a lot of activity leading to innovation on scaling and security. Besides blockchain and cryptocurrencies these innovations are also likely to benefit other sectors in future.
Another factor that is working in the favor of South Korea is its education system and the engineering talent it is producing. South Korean students for instance are consistently ranked among the top five in the globe in math and sciences.
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