South Korea’s Financial Regulator to Have a Separate Department for Crypto
South Korea understands the necessity of encouraging the innovation and the new age technology. Therefore, the country’s Financial Services Commission (FSC) is getting ready to have a separate department mainly for policymaking decisions in the cryptocurrency market and blockchain technology. This is a significant development considering that the overall digital currency market is showing recovery as the market is also maturing itself. That is because of growing awareness and execution of regulations in most of the countries around the globe.
Another key point is that the latest move comes on the heels of the FSC disclosing last week that it will go through a big organizational restructuring exercise. That meant its intention is to establish a body known as the “Financial Innovation Bureau.” The objective is mainly to support the financial consumer protection and at the same time effectively react to any financial innovation. The country is hoping to gain from the fourth revolution of industry, and the two departments would be entrusted with the responsibility of nurturing the Fintech industry in the country.
An official from the FSC commented, “The new Financial Innovation Bureau will also be tasked with policy initiatives for financial innovation, such as innovating financial services using FinTech or big data, and responses to new developments and challenges such as cryptocurrencies,” Importantly, the latest development of establishing a temporary department is in accordance with the Financial Stability Board’ (FSB), blocktribue.com reported. There is no doubt that these steps come at a time when the digital coin market is recovering despite slow growth in adoption rate.
The most interesting aspect of FSB’s report is that it claimed that virtual assets are not posing any material risk to the financial stability at international levels. That does not mean that there is no need for surveillance. The Korean’s FSB to thinks there is an absolute requirement for monitoring the cryptocurrency market vigilantly citing the developments that are taking place at a rapid pace.
Significantly, a year ago in September, the FSC has banned firms from the domestic turf, as well as, startup firms from engaging in any of the initial coin offerings (ICOs). However, the National Assembly has sought the rescinding of the ban in May and instead wanted legislation to be proposed. The aim is to enable ICOs to hit the market since there is an effective mechanism to monitor investor protection.
Significantly, one of the tasks assigned by the National Assembly to the government was to create a task force. This was meant to enhance the transparency level of those dealing with cryptocurrency trading. At the same time, it wanted to create a healthy trade order for its consumers.
Following the rook-top high prices of most of the digital coins in December last year, there were knee-jerk reactions from regulators across the world. South Korea was also one among them as everyone was keen to protect their country’s investors’ interests. Now that the market is maturing itself despite ambiguity, countries are trying to address issues one-by-one.