The East Asian country that is considering an outright ban on bitcoin

The South Korean government has announced a slew of measures to crack down on cryptocurrency trading in the country. The government has proposed a legislation which will restrict the extent to which conventional banks interact with bitcoin and other cryptocurrencies.

The legislation will prohibit banks from providing settlement services for unidentified digital-currency trades on bitcoin exchanges, the government said on Thursday. That means, for all practical purposes, if Koreans use credit card or net banking to buy cryptocurency at the exchange, they will not be able to do so as there would be no settlement.

Last month, in a separate set of rules issued by the authorities, financial firms were restricted from investing in cryptocurrencies. However, the rules also levied a capital gains tax on any money conventional investors made from trading the digital currency.

Similar to the laws in the US, the proposed law in South Korea would mandate the companies trading bitcoins and other cryptocurrencies to provide the details of their customers whenever asked for. The Know-Your-Customer clause will be to curb the possibilities of money laundering through cryptocurrencies.

In the US, multiple high profile money laundering prosecutions have been initiated against those who have not complied with the norms.

Though, this proposal by the South Korean government may not be the strictest one in the offing. In a statement, the government had floated an idea to ban the cryptocurrencies outrightly. However, there are doubts if such a ban will be practically feasible.

Currently, China is the only country to completely ban the bitcoin exchanges.