[THE INVESTOR] Blockchain expert Don Tapscott called on the Korean government to take a “smart and sensible” stance while regulating cryptocurrencies, adding heavy-handed moves like an outright ban on initial coin offerings could hinder the development of blockchain technology and “crush and destroy economies for decades.”
“There are two ways the government can regulate cryptocurrencies,” Tapscott told reporters at a press conference held during the “Blockchain Revolution: Convergence with Traditional Economy” forum in Seoul on Jan. 17. “There are heavy-handed regulations by dictators and undemocratic countries that seek to ban cryptocurrencies and ICOs and there are approaches taken by smart democratic countries that want to build an innovative economy.”
“In the case of Korea, it’s not clear which way the country will go. But there is an optimal and correct direction. It’s not that complicated.”
His recommendation is for governments to benchmark the ICO guidelines set by the US Securities and Exchange Commission, which differentiates between security tokens -- a coin that represents a share in a company -- and tokens that are not.
“Any token sale for security should fall under the securities regulations and be fully transparent, fully regulated,” he said. “But most tokens don’t represent securities. They represent something like loyalty points, carbon credit, future in some software or the monetization of the supply chain or currency. In those cases, it makes no sense to regulate or ban ICO.”
Last year, Korea announced a complete ban on ICOs. Earlier this week, the government indicated it is toying with the idea of shutting down all local cryptocurrency exchanges in a move to stamp out speculation frenzy. Following the news, prices of Bitcoin and other currencies skidded here – the world’s third largest Bitcoin trading country.
Tapscott, co-author of the best-selling book “Blockchain Revolution,” hopes people understand blockchain technology’s capabilities that extend far beyond cryptocurrency trading.
“The real important technology is the underlining blockchain technology that enables people to trust each other to do all kinds of businesses and business models,” he said. “Cryptocurrencies are an important part of this and to inhibit their growth or to deny doing an ICO is very harmful.”
Tapscott views Korea is at a critical crossroads when it comes to leading the new internet era. “Korea has talented young people, good universities, science, stable government and access to capital, and all we need is for government to be smart and sensible,” he said. “To understand that there is a historic opportunity here to build a future economy and future miracles that will lead to growth, wealth, social security, stronger democracy and economic and political stability in a country.”
“I hope the government will do the right thing and not make a mistake,” he said.
By Ahn Sung-mi (email@example.com)