In an effort to boost its bitcoin-mediated foreign currency transfer market, South Korea is rolling back some of its pesky capital requirements.
According to financial industry source on Sunday, the Ministry of Strategy and Finance will ease the equity capital criteria for fintech companies involved in foreign currency transfer service defined in the revised Foreign Exchange Transactions Act from more than 2 billion won ($1.76 million) to 1 billion won, effective on July 18. Small foreign currency transfer agencies whose quarterly foreign currency transfer amounted to less than 15 billion won for the past two consecutive quarters are subject to the deregulation.
The change comes shortly after the ministry received harsh criticism for revisions it had made to the bill. Earlier this year, the ministry allowed fintech companies to conduct bitcoin-based foreign currency transfers but the 2 billion won equity capital criteria was deemed much too high for startups. Apparently, not a single bitcoin-mediated currency transfer company met the criteria.
With the bar lowered however, things are looking up for the nation’s money transfer startups:
“The new equity capital requirement can be met with a little bit more efforts on previous investments. We will attract additional investors by the end of July to meet the new criteria,” said an executive of an unnamed company.
Photo: Mike Poresky