South Korea is actively searching for fair and balanced ideas as it works towards establishing its cryptocurrency regulatory structure. To expedite this process and guarantee a proposed regulation by mid-2025, formal discussions have commenced, as per recent updates from domestic news outlets.
The announcement follows a discussion at the Financial Services Commission (FSC), which took place on Wednesday, as reported by Edaily. This meeting aimed to identify key focus areas for an impending legislative proposal.
South Korea to Make Investor Protection and Clear Crypto Regulation a Priority
Essentially, significant economies globally are expediting their regulatory structures for cryptocurrencies. As expressed by FSC Vice Chair Kim So-young, South Korea’s intention to follow suit seems prudent. Furthermore, swift regulation development, ideally accompanied by clarity, could result in enhanced investor protection within the country.
South Korea has been on a lengthy journey towards establishing a comprehensive regulatory framework for cryptocurrencies, with significant progress made in 2023 when legislation was passed. This legislation took effect last July, but it also introduced tighter standards, particularly for crypto exchanges. One of the new rules mandates that service providers must maintain at least 80% of user crypto deposits securely in offline storage, separate from their own funds.
The Vice Chair of the FSC is said to have indicated that the forthcoming regulatory framework will adopt a broader perspective compared to previous ones. In simpler terms, this suggests that the new framework aims to cater not just to service providers but also to crypto investors themselves, as well as the entire crypto market.
According to Edaily, during their Wednesday meeting, the Financial Stability Commission deliberated over a variety of issues. These included establishing regulations for stablecoins and improving transparency when listing cryptocurrencies on exchanges. Additionally, they discussed implementing disclosure requirements for crypto companies that are equivalent to those in traditional finance.
Why Now?
It’s noteworthy to mention that South Korea boasts one of the most significant cryptocurrency markets globally. To give you an idea, their local platform, Upbit, was the third-largest centralized exchange worldwide in terms of trading volume only a month ago.
It’s likely clear why the government recognizes the significant role the sector plays economically. Given this understanding, they seem to believe that regulation is the best approach to reinforce South Korea’s presence in the international cryptocurrency market and simultaneously mitigate any investor risks.
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2025-01-15 14:03