Stepping into a new era of financial advancements, South Korea is reportedly going to relax its previous limitations on institutional cryptocurrency investments. The Secretary-General of South Korea’s Financial Services Commission (FSC) has recently brought forward the organization’s commitment to re-evaluate its restrictions in light of the evolving regulatory approach in South Korea towards cryptocurrencies.
FSC’s Proposal to Soften Rules
As per Wednesday’s report by the Yonhap News Agency, the Secretary-General of the FSC, Kwon Dae-young, declared that legal bodies will be permitted to start investing in cryptocurrencies this year. Kwon expressed that the regulatory authority aspires to reduce its constraints on institutional crypto trading and investments to intensify the cooperation between financial institutions and fintechs.
The FSC is reportedly preparing to entertain a proposal that would allow firms to have real-name accounts, a privilege currently withheld. These real-name accounts are obligatory for investing in virtual assets as only accounts that have fulfilled this verification under the Specified Financial Transaction Information Act are sanctioned to invest in digital assets.
However, financial authorities have previously confined institutional crypto trading by advising banks not to issue these accounts to corporations, despite the nonexistence of any legal hindrance or official prohibition.
In the “Major Work Plan for 2025,” the FSC has unveiled that this alteration will be progressively put into practice. The financial regulator is formulating a meticulous plan to permit non-profit corporations first and then broaden the scope gradually.
Shifting Crypto Environment in South Korea
Over the past few years, South Korea has been striving to transition to a regulated and stable environment for investors. The Chairman of Kora Exchange, Jeong Eun-bo, urged lawmaking bodies and financial institutions to alter their understanding of crypto assets.
Jeong proposed that the country’s regulatory body should think about integrating virtual assets into institutional finance to rejuvenate the market and foster competition with other nations. It is significant to mention that the FSC’s stance on virtual assets has been perceived as a hurdle to the market’s growth and global competitiveness.
FAQs
What changes are expected in South Korea’s cryptocurrency landscape?
South Korea is reportedly preparing to relax its limitations on institutional cryptocurrency investment. The Financial Services Commission (FSC) is considering a proposal to allow corporations to have real-name accounts, necessary for investing in cryptocurrencies.
What is a real-name account?
A real-name account is currently necessary for investing in virtual assets in South Korea. Only accounts that have fulfilled verification under the Specified Financial Transaction Information Act are allowed to invest in digital currencies.
What is the FSC’s stance on cryptocurrencies?
The FSC’s stance on cryptocurrencies is currently viewed as a challenge to the growth and international competitiveness of the market. However, the entity is planning a shift towards more relaxed regulations for cryptocurrency investments.
Conclusively, these steps taken by South Korea mark a remarkable shift in the perception and regulation of cryptocurrencies. FSC’s move to ease restrictions and foster growth in the digital asset sector signals the increasingly significant role cryptocurrencies are playing in the world economy. As South Korea continues to adapt and innovate, we can expect to see more developments in the future, shaping an exciting new landscape for institutional crypto investment.
