According to reports by a Korean media agency, the South Korean government has planned to simplify and ease equity capital requirements for fintech companies to provide foreign currency transfer service. The decision aims to boost bitcoin-mediated foreign currency transfer market.
Those fintech firms that offer bitcoin-mediated foreign currency transfer services will see easier regulations that will be effective from July 2017. The announcement stated that small agencies whose quarterly foreign currency transfer amounted to less than ₩15 billion for the past two consecutive quarters are subject to the deregulation.
There are about 20 fintech companies that utilize bitcoin for foreign currency transfer services to Korean citizens. However, the ₩2 billion minimum capital requirement was a figure too steep for FinTech companies. Among those fintech firms offering bitcoin-mediated foreign currency transfer, no single company meets the ₩2 billion equity criteria.
“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 to Pulse News.
Bitcoin-mediated foreign currency transfer is the faster as well as cheaper remittance. Traditional bank remittance through SWIFT routinely takes about 3-4 days between payment and settlement of the transaction and service fees amount to up to 6 percent of total remittances.
The foreign currency remittance in Korea, commercial banks have raked in some ₩500 billion as fee income from foreign currency transfer services each year.
