Do they even democracy? – might be a question some ask themselves of South Korea after an apparent ban and an apparent unban of crypto trading.
Because banning an asset is quite unprecedented in a democracy and very much something limited to authoritarian countries, like China, which bans everything, including French cheese.
The Chinese media is parroting the party line, patting themselves on the back for “protecting” their citizens from 100x and even 1,000x gains. We did good, effectively said an official, see how much the assets have grown in value, he continued with a straight face.
That dissonance they justified by suggesting it would crash, seemingly oblivious to the fact this is a nearly ten years old technology which has indeed crashed at times but then has gone on to rise another 10x or 100x.
But China perhaps did not have much choice as crypto was subverting their foreign exchange manipulations with their citizens opting out of their monetary mismanagement.
So they banned it, or so they thought, because almost instantly South Korea entered the space with huge volumes. Where did they come from? Did they really just wake up one day and all thought of buying crypto or did the Chinese go to build infrastructure there, with the local population then gradually gaining an interest?
The answer we do not know, but this is a global market frequented by, usually, the more intelligent citizens of nations. With so much money to be made, would they really stop at just some words we call law?
Here is what would happen within days of South Korea potentially banning crypto. Japan would suddenly become an even bigger player. Just as some called South Korea the new China, some will start calling Japan the new South Korea.
The island nation would rise as the trading hub of East Asia and Tokyo might once more deserve the name of financial capital. In the process, their economy might be rejuvenated and might even come out of the decades slum.
Suddenly, we might then start hearing much more news of a Japanese company doing this or doing that. Probably because talent would have moved there.
And if Japan, a mirror of Britain in many ways, embraces the phenomena with their Chancellor declaring the island open for business; money, talent and innovation might start flocking and even booming.
A South Korean crypto ban would be the greatest gift in a century or more for Japan if it wants it or for one of the other financial centers in the region, such as Singapore or Hong Kong.
And if we are right that those involved in this space are some of the more intelligent, then we’d think talented South Koreans are already making plans to leave, at least as a back up if nothing else.
Because today’s episode has put them on notice. Their elected do not know what they have and they are seemingly thinking of giving it all away. Necessarily their economy would eventually suffer because innovation would go elsewhere. And innovation breeds innovation, not to mention that innovation in this space can be of a strategic kind, like the railways.
Nations that had railways in the 1800s quickly advanced. Britain, of course, went on to conquer the world. For money to move instantly, across the globe, as a bearer asset, can be at the same scale.
So South Korea would not be banning crypto, they would simply isolate themselves. Crypto would go on and South Korea would quickly be forgotten, just as no one talks of China anymore. But the country in that region that embraces crypto fully might become this century’s regional trading hub.
Because crypto is not just crypto, crypto is people and ideas first and foremost. Some of those people are literal geniuses. This generation’s Tesla or even Einstein. Many want to be near them. Other industries thus cluster around. Organically so creating a boom in innovation. In all fields, from manufacturing to music to law.
What political system would come out against this, can only be explained by an out of touch ruling class that belongs to the last century. But all they can do is delay, because eventually they’ll give way to the new generation.
Yet delay in a time of fast innovation can be very costly for nations as they risk being left behind. What we see now is speculation because the technology needs a bit of time, time which the market is pricing in. But in a couple of years, the world might start transforming. Where innovators have clustered at that point might determine what country goes on to rule the world.
So ban it. You’ll only chain yourselves.