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S.Korean Card Firms Block Payments in Foreign Cryptocurrency Exchanges
Amid Concerns Over Customers’ Opposition
S.Korean Card Firms Block Payments in Foreign Cryptocurrency Exchanges
  • By Yoon Yung Sil
  • January 22, 2018, 01:45
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Currently only 20 major digital currency exchanges are blocked in South Korea but an increasing number of exchanges will be continuously blocked in the future.
Currently only 20 major digital currency exchanges are blocked in South Korea but an increasing number of exchanges will be continuously blocked in the future.

 

The card industry is suffering from concerns over a backlash from customers as it has blocked the payment in foreign cryptocurrency exchanges in line with the government's moves to curb a frenzy of cryptocurrency speculation.

According to related industry sources on January 21, Lotte Card and Shinhan Card has introduced systems blocking transactions by investors for the purchase of digital tokens from 20 overseas virtual currency exchanges using either debit or credit cards, starting with Woori Card on the 18th. Other card issuers, including Kookmin Card, are also planning to complete the blockade by the end of this week.

The Credit Finance Association said, “Currently, only 20 major digital currency exchanges are blocked but we will confirm and share information about exchanges grasped by individual card issuers. An increasing number of exchanges will be continuously blocked in the future. There are about 7000 cryptocurrency exchanges around the world.

Card companies have adopted the system in line with the government’s efforts to tackle speculative investment in virtual currencies. However, they express concerns over the opposition from domestic investors. This is because it can lead to a legal dispute when a customer file a suit as there is no clear legal basis on banning the payment in foreign exchanges.

In addition, investors can purchase digital currencies through foreign simple payment systems, including Paypal. Therefore, there is a growing controversy over effectiveness as the measures cannot completely prevent investors from using overseas exchanges.

An official from the industry said, “Card companies are highly sensitive as they witness customers recently boycotting Shinhan Bank when the bank tentatively postponed the introduction of the real-name cryptocurrency transaction system. Some market watchers said that the systems blocking transactions in digital currency exchanges would be fizzled out due to concerns over complaints. However, they are finally all in line with the government’s policy.”