In the proposal, Park cited the need to address “the void of a state-led protection that guarantees digital currency’s value,” “digital currency’s nonexchangablilty to other existing currencies” and “the possibility of wreaking havoc on national economy from digital currency bubble burst.”

For the past two years, bitcoin worth 1.92 trillion won was traded, according to data from digital currency market tracker Coinass. The data also showed the number of transactions of bitcoin in 2016 rose by 17.1 percent from 2015.

Coinass, which is privately owned and the only market tracker, has tracked bitcoin transactions and closing prices since 2015, and ethereum transactions since October 2016. But local cryptocurrency transactions are not still fully tracked, Park noted, adding the government control is in need.

Moreover, virtual currency trading platforms in Korea, including Bithumb, Korbit and Coinone, taking up 75.7 percent, 17.6 percent and 6.7 percent in the market respectively, have no legal grounds for their establishment, according to Park and the Financial Supervisory Service.

Experts hailed the move, which came in line with Tokyo’s fresh set of bitcoin regulation introduced in May. Putting digital currency under state control is translated into “removed uncertainties” and “boosted transparency,” said Kim Kyung-hwan, head attorney of law firm Minwho.

“User protection, tax evasion and money laundering have long been issues in terms of digital currency transaction,” Kim told The Korea Herald. “Digital currency traders have often found themselves in trouble, because they are out of a legal boundary.”

South Korea’s local currency had the fourth-largest bitcoin exchange trading volume from April 1 to June 10, according to data from Cryptocompare. More investors tend to flock to virtual currencies due to skyrocketing trade prices, while some, including lawmaker Park, compare the cryptocurrencies with tulip, whose price bubble burst rattled the European nations.

By Son Ji-hyoung (consnow@heraldcorp.com)