Early on, the most appealing thing about bitcoin was its anonymity, making it the payment of choice for online black markets. The appeal has since broadened, though anonymity remains a key factor for many cryptocurrency users…and it could be anonymity, or the lack thereof, that influences whether cryptocurrencies grow or wither. South Korea has just announced a major change to cryptocurrency trading, stating that everyone within the nation who trades will need to use their real name.
South Korea has seen a massive increase in cryptocurrency trading recently, spurring the nation’s government to make a big change: you must trade with your real name. The mandate has been made in an effort to cut down on speculation. This follows a huge uptick in trading within the nation, that itself coming at a time when bitcoin’s value has skyrocketed to, at one point, more than $19,000 USD.
Attaching a real name to bitcoin and similar cryptocurrencies removes the anonymity and, for many, the appeal. The anonymity itself has been controversial, though, as governments worry about tax implications, law enforcement fears its ability to fuel illicit markets, and more. All the while, cryptocurrencies remain volatile and risky, though that hasn’t stopped many from investing thousands in them.
By requiring real names, the South Korean government will have the ability to track trading and, when appropriate, tax the investors. Speculation remains at the heart of the problem, though, with government officials saying in a statement, “The government can’t let this abnormal situation of speculation go on any longer.”
Not surprisingly, bitcoin price fell following South Korea’s announcement. No doubt many will continue dabbling — even heavily so — in cryptocurrencies. In fact, this isn’t the first time bitcoin and other virtual currency have faced a stripping-away of anonymity. As pointed out by the Times, cryptocurrency exchanges in South Korea can already identify customers using cell phone data, and they’ve been working with the nation’s banks on additional transparency measures.
SOURCE: New York Times