It might take longer than expected, but a new South Korean law that was recently passed makes it legal from July 18th for international money transfers to be done using Bitcoin.
It might be a small thing, but it is a huge step in the grand scheme of things for Bitcoin. This will slowly but surely challenge traditional banks and international wire transfer company like Western Union, PayPal and the like.
Recently Japan's lawmakers recognized Bitcoin as a legal tender; this is claimed to be one of the factors that lead to the last cryptocurrency rally that pushed Bitcoin over $3,000 USD.
The amended law was the South Korean Foreign Exchange Transactions Act that will now enable FinTech businesses to register with the Financial Supervisory Service (FSS) to provide the service of international money transfer for small funds. Once a company has successfully registered with the FSS, then they can choose several methods to send money abroad – and this includes Bitcoin as well.
A FinTech company will be required to have a paid-up capital of more than $2 Billion South Korean Won or ~$1.75 Million US Dollar and a debt-to-equity ratio of below 200% to apply for the permit. And once it gets approved, the company will then be limited to a transfer of a maximum equivalent amount of $3,000 USD. It also comes with an annual limit that will be set at $20,000 USD.
This will indirectly challenge the norm for traditional banks by offering money transfer services for a smaller fee and faster transfer time.
For instance, most banks do charge a commission fee of 5-6% per transaction, and it typically takes 2-3 days for the transfer to be completed.
Now with FinTech companies joining the fray, they can even charge as low as 1% fee per transaction that can be completed in just 3 minutes. That’s how cheap and fast it will be. This could only mean good news for consumers and everyone involved.
Except for the banks, it is, as they will have to innovate and embrace this new law to their advantage. We could even see partnerships between traditional banks and FinTech companies to make full use of this new law eventually.
With worldwide acceptance becoming closer to reality, the new South Korean law is indeed seen as a huge step forward for the Bitcoin community. There are more positive sides to it, and surely there will be more to come shortly.
Category: Team WhaTechCompany profile: Tech junkie by profession and passionate about anything from the digital world, movies, games and reading. He loves writing and hopes you enjoy his writing as much as he does. Eza, is also known as Don in the virtual world, but don’t him me wrong, he's not a mafia type he's really a nice chap and a devout family guy.