• The South Korean Financial Services Commission (FSC) released rules on January 6th that outline which digital assets are regulated as securities in the country.
• Assets like stablecoins will operate following the upcoming digital assets regulations.
• The guidelines support innovation and simultaneously ensure consumer protection.
South Korea’s Regulations on Digital Assets
The South Korean financial services commission (FSC) recently published rules on Jan. 6th that define which digital assets can be regulated as securities in the country. According to these guidelines, all blockchain-based tokens will be treated and regulated as securities if they possess inherent characteristics that fit them into the country’s capital market act. This includes assets used for staking to derive dividends.
Digital Asset Regulations
On the other hand, any asset outside this category of security such as stablecoins will be held to different regulations under the upcoming digital asset regulations. In addition, the FSC has stated that cryptocurrency and other digital assets’ security-like financial assets will have to undergo case-by-case assessments by issuers and brokers, such as crypto exchanges, according to these rules.
Consumer Protection & Innovation
These new guidelines promote innovation while simultaneously ensuring consumer protection through regulation of digital asset markets in Korea. Initially, there will be more promotional activities with a focus on institutionalization throughout 2023 when these drafted guidelines go through assessments before becoming official policy.
South Korea’s Crypto Ecosystem
South Korea is one of few countries with a strong presence in the crypto ecosystems with many initiatives being taken towards legitimizing it within their borders over recent years. For instance, Yonhap reported back in 2018 that the government was investing 4 billion won into developing a blockchain-based virtual power plant and then later during a national assembly policy discussion on ICOs highlighted how important an internationally consistent crypto regulatory framework is for proper governance of cryptocurrencies globally .
Busan’s Plans for a Decentralized Market
In January 2023, Busan announced its plans to build what would become world’s first decentralized digital commodity market by H2 2023 with all products tokenized and traded on the blockchain infrastructure while also providing an avenue for tackling money laundering issues through launching their “virtual currency tracking system” proposed by ministry of justice at around same time period .