April 26, 2024

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[THE INVESTOR] Local IT firms and academics raised concerns on Jan. 12 that the government crackdown on cryptocurrency trading may adversely affect the blockchain sector, the core technology of such transactions.

Firms engaged in blockchain-related businesses drew the line on possible effects from the government action, saying that virtual currencies like bitcoin are only one of the many services of blockchain, an open, distributed ledger system that is safe to use.

“We do not expect any serious repercussions on the projects that we are currently working on,” an official at the ICT firm SK Holdings C&C said.

Another official at LG CNS, which is planning to launch financial services based on a blockchain platform, also downplayed the negative aspects of the technology. “We are actually hoping that companies that are developing and applying innovative blockchain-based service models will be spotlighted more,” he said.

But others say spin-off businesses may become inadvertent targets.

“We had expected a value-added services market from increased trade of cryptocurrencies,” an official from a local IT company said in response. “Now, that has become difficult due to government restrictions.”

Shin Min-soo, a professor at Hanyang University, said the restrictions will discourage small and medium enterprises from using blockchain to develop new products and services. “The scope and frame of the restrictions need to be made clearer,” he said.

By Alex Lee and newswires (alexlee@heraldcorp.com)