Trump's 'Crypto Capital' Ambition... Korea Falling Behind [Taepyeongyang's Future Finance]

US, Promoting Innovation and Regulatory Easing

Blockchain Technology Global Leadership

Korea, Missing Opportunities in Web 3.0 Due to Regulations?

Han Kyung Law & Business's 'Law Street' column provides practical legal knowledge to companies and individuals. Professional lawyers cover various legal issues such as taxation, inheritance, labor, fair trade, M&A, finance, and more, offering key judgment analysis.

President-elect Donald Trump of the United States declared his intention to make the US the 'Crypto Capital of the planet'. Crypto refers to blockchain technology, which involves encryption and is related to encrypted assets. From a perspective that sees encrypted assets only as targets for investment prevention and regulation, like in Korea, it can be seen as a bold pledge. However, looking at Trump's recent nominees for Treasury Secretary and Attorney General, it seems this pledge will be realized.

In the US, blockchain technology has already led to the development of technologies such as blockchain mainnet, staking, and investment in virtual assets, with funds and ETFs advancing. Meanwhile, without legal regulations, the US Securities and Exchange Commission (SEC), led by Chairman Gary Gensler, has implemented strong regulations. Major tokens like Ripple and Solana were regulated as securities, and lawsuits were filed. The crypto industry criticized that without clear regulations, only law enforcement was conducted, resulting in a situation where 20% of US investors and innovative companies moved abroad.

The US has led innovation in every stage of computer, software, and internet development. Startups using previously non-existent new technologies began new products and services, gradually taking over the market, eventually replacing existing products and services. In this way, innovative startups could become new strong players, but no company could monopolize the market position due to the 'competition law' acting as a deterrent.

In reality, IBM's hardware-software bundle sales and Microsoft's bundling of software like Word and Excel were regulated by antitrust laws, hindering the growth of new companies. Of course, new technologies or new services provide more convenient life and lower prices to consumers than existing companies, offering fundamental value, which is the basis of innovation.

Blockchain and virtual asset services are still in their early stages, but they are providing new fundamental value that was not present in companies' services. With a decentralized approach, anyone can become a node and participate in the network structure, and individuals from all countries can trade assets and financial transactions more cheaply, quickly, and safely without borders.

Currently, the platform on the internet is monopolized by large tech companies like Google and Facebook, but if replaced by blockchain networks, users and content providers can receive revenue distribution through a tokenized data set. For users, Web 1.0 was just about reading information, but now, beyond Web 2.0 (read-write), where Big Tech dominates, users are moving towards Web 3.0 (read-write-own), where they own value.

Recently, the US Department of Justice issued a comprehensive order on the business of the Chrome enterprise in the competition law sector, indicating that Web 2.0 companies are not only benefiting from internet network businesses but also monopolizing data rights of customers, which is contrary to the direction of the token ecosystem aiming for Web 3.0.

Trump's Crypto Capital ambition is expected to be followed by the establishment of clear and favorable regulations in the industry. The Republican Party's majority in both the upper and lower houses is also a supportive factor. This will lead to the expansion of token issuance by financial companies and the growth of a decentralized network to counter Big Tech.

On the other hand, Korea, which recorded the world's largest virtual asset trading volume from 2017 to 2019, dreamed of becoming a leading country in the blockchain sector, but faced setbacks in technology and service development due to regulations focused only on investor protection and market soundness. Government support for blockchain technology was also excluded from all token-related matters, and the virtual asset pledges of the last election were also neglected.

Now, Korea must establish a national strategy through fundamental research on the economic impact and value of virtual assets. In a situation where global competition in Web 3.0 is accelerating, led by the US, EU, and Japan, Korea cannot afford to fall further behind in global leadership. It's time to find a balance between innovation and regulation and prepare for the issuance of new contracts.

Park Jong-baek, Lawyer (Yuhan) Taepyeongyang Attorney I graduated from Seoul National University Law School and obtained a master's degree in law from the same university. He completed the 18th class of the Judicial Research and Training Institute in 1989. He started his legal career in 1992 and received the Chevening Scholarship from the British Foreign and Commonwealth Office in 1999, obtaining an LL.M. in International Financial Law from the London School of Economics. He worked at the London office of Richards Butler and the Hong Kong branch. Since 2007, he has been engaged in legal work related to open source licenses and compliance, and later joined FSFE as a member and served as the director of the Open Source Law Center. Since 2016, he has been actively involved in the blockchain sector, including ICO, STO, DeFi, NFT, game tokens, tokenization, and DAO projects, and has conducted legal work on settlement services using tokens. He actively participates in seminars and discussions related to digital asset public-private cooperation TF, the National Assembly, and domestic and international organizations and academia, and is actively writing columns on blockchain innovation. Based on his extensive experience in dealing with various companies and governments in the blockchain sector, he has focused on 'The World Changing with Crypto Sapience'.

Taepyeongyang's Future Finance Strategy Center (Director: Han Jun-sung) will be published in May 2024, focusing on digital innovation acceleration and financial technology development, with experts in virtual assets, electronic finance, regulatory response, and information protection in the finance and IT sectors.