South Korea has announced that they will be regulating cryptocurrency transactions. The "catch" is that you have to use your real name. In other words the anonymous nature of cryptocurrencies is going away in South Korea. I expect that other countries will eventually follow South Korea's lead on this. South Korea is a heavy-trade center for Cryptocurrencies. So it's not surprising that the government there has been making quick and early moves in this area. But I believe it's just the leading edge of a tectonic shift in public policy.
Some are looking at these changes and see infringement. Cryptocurrencies have been a hotspot for people with libertarian views who see it as a way to handle money (and economics in general) without a lot of government oversight. For those individuals, this kind of regulation is a horrific infringement upon what cryptocurrencies mean to them.
I have to counter that view. I respect many aspects of libertarian belief. But I'd assert that those beliefs need to enter into our society in other ways. Cryptocurrency was never going to be the answer, the vehicle for a Libertarian economy with little or no government controls. It's just a tool that works with Libertarian-ism.
Cryptocurrencies are a vehicle, but they are a vehicle for the technology they represent. Blockchain technology, the idea that "money" can be something other than the U.S. Dollar or the Euro or (insert fiat currency here). They represent a departure from the traditional views on what constitutes money and value.
Right now that view is still in the minority. Despite a wave of acceptance and interest, there are still a lot of skeptics out there. My own wife, a very smart, college educated woman with an investment portfolio, recognizes the potential. But right now she still sees it as "fake money."
What cryptocurrency needs is legitimacy. It needs to be seen as a legitimate thing. Not a ponzi scheme, not a trick. Not pixie dust. It needs to be seen as legitimate in the eyes of the average working man or woman.
Although trust in government is down overall. The average man and woman still accepts what the government says. If its illegal, its bad, if its legal, it's ok, it's legitimate.
What South Korea has done is legitimatize cryptocurrency in a way that few other countries have so far. They are trying to merge it with the existing practices of national and international business. They are trying to merge it with the existing and longstanding practices of the business world.
That's not a bad thing. It's perhaps not the great libertarian revolution that some dreamed of. But more average people are going to see it as more acceptable, more legitimate, more in line with the existing range of fiat currencies.
Legitimacy is the greatest thing anyone anywhere can do for cryptocurrencies right now. It has its supporters, its early-adopters who believe in the technology and believe it has value. It has the backing of a lot of people pouring money into it. What it needs is widespread acceptance that it has value in the traditional sense. Legitimacy will do that.
So don't see South Korea's move as a bad thing. See it as a step toward legitimacy.