- The unregulated nature of crypto currencies could not let the government exactly determine where the money was moving.
- Large sums of money were indirectly leaving these countries.
- The market was taking over others more beneficial to these two massive economies.
In August 2017, China announced that it is planning on imposing a ban on ICOs within the country because the supply and demand were going out of control. In addition, corrupt parties which collected these countries started making a run with the money, and China is a strong believer in how these currencies are a great way to source suspicious and terror based motives, despite it being one of the biggest Bitcoin markets worldwide. South Korea soon followed suit by declaring that it will carry out punishments against those found guilty of taking in ICOs.
The gesture of these countries is generally a bold one and was received well by many countries because state control is of primary importance regardless of whether a government slides to a rightist or a leftist mindset. China may have banned ICOs but was smart not to stop research operations on valuable technologies such as Blockchain. This technology might go on to provide the foundation of absolutely secure peer to peer communication in the future and has numerous other uses other than for the sake of securely sending and mining cryptocurrencies. There might be some uproar in the public because at the end of the day cryptocurrencies have been a supply of instant money for many people now, but for two countries which are famous for their labor productivities maybe this is not the ideal ‘home-based’ work.
What a lot of analysts and people do not understand is that in the long run China and South Korea have actually taken a step which will protect the interest and the finances of their civilians. In addition, government bonds and securities will not lose importance to ICOs, and these treasury bills are actually quite beneficial to governments and civilians because they can use the earnings to invest back into the country and make job opportunities and give rise to business loans through quantitative easing. The bans are not to be confused with lifelong ones; they can be lifted once the governments are able to figure out ways to completely validate the legality of ICO dealings, but for now, this has delivered a hit to cryptocurrencies worldwide which will be hard to recover from.