Prices for Bitcoin, Ethereum, and other cryptocurrencies dropped today after news reports said the South Korean government was considering a ban on the trading of digital currencies.
"There are great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges," South Korean Justice Minister Park Sang-ki said in a news conference today, according to Reuters. Hours later, however, the office of President Moon Jae-in said that proposal was just one of several regulatory moves under consideration.
As of this morning, many digital currency values had recovered somewhat from their earlier lows following Park's comments. However, Ethereum's price remained more than 8 percent lower, while Bitcoin's value was down by more than 3 percent.
Growing Business Interest in Blockchain
While Bitcoin, which saw its value skyrocket and then crash last year before rebounding, has been criticized by some leaders in more traditional areas of finance as a bubble or even a "fraud," the cryptocurrency's underlying technology is seeing wider interest and adoption by a growing number of mainstream businesses.
For instance, Kodak revealed at the CES 2018 consumer electronics trade show in Las Vegas on Tuesday that it was offering customers a Bitcoin mining device in partnership with a company called Spotlite. Under the deal, customers would pay $3,400 upfront to rent a machine that can handle the energy- and computing-intensive tasks needed to generate new bitcoins, and would evenly split with Spotlite any value gained over the following two years.
Kodak this week also announced the launch of KODAKCoin, a cryptocurrency supported by a new company platform for photographic digital rights management.
Over the past few days, both Western Union and Seagate Technology have also seen their stocks rise after both were rumored to be partnering with Ripple, another digital currency. And many companies in banking, insurance, logistics, and other areas are exploring the possibility of using distributed ledger technologies similar to Bitcoin's blockchain model to record and track business transactions.
Regulators Are Watching
As more businesses eye blockchain's promised benefits of providing secure and transparent records, many investors and mainstream consumers have been attracted by the rapid rise in cryptocurrency values. South Korea alone has more than a dozen exchanges specializing in the trading of cryptocurrencies, according to Reuters.
Officials in a number of countries have discussed various forms of regulation as cryptocurrency trading activity has grown. In South Korea, for example, the rising demand for digital currencies has raised government concerns about gambling addiction and other problems.
Cryptocurrency shortages and difficulties in converting digital currencies into Korean won are also challenges in South Korea, Ripple's chief cryptographer, David Schwartz, noted earlier this week on Twitter.
The world's digital currency market is currently valued at $27 billion, "which represents a level of value creation on the order of Silicon Valley success stories like AirBnB," according to a Global Cryptocurrency Benchmarking Study released last year by the University of Cambridge's Centre for Alternative Finance.