South Korea Introduces New Crypto and Blockchain Classification Guidelines

South Korea Introduces New Crypto and Blockchain Classification Guidelines

The South Korean Financial Services Commission (FSC) has revealed new guidelines for cryptocurrency regulations, just as the nation’s central bank, the Bank of Korea (BOK), reported that total balance of Korean cryptocurrency investment as of December 2017 stood at almost USD 1.8 billion.

Recent events

South Korea has made frequent crypto-positive headlines in regards to cryptocurrency regulation and blockchain technology adoption. Recent news of major hacking attacks provoked a swift regulatory response from the South Korean government in June, sparking some concerns over how strict these regulations would be.

However, South Korea has been making significant efforts to revise these regulations in a positive light; regulators plan to ease the rules on regulations and the classification of cryptocurrencies in line with the G20 recommendations.

Bank of Korea’s crypto report

Local media outlet Yonhap News reported on 6 July that BOK released a report regarding the significant virtual crypto-assets being held by the nation’s commercial banks. Totalling KRW 2 trillion (USD 1.79 billion) as of December last year, the figure sits at roughly 8% of the total deposits by the country’s brokerage houses, which are worth 26 trillion won.

The BOK doesn’t see this as particularly significant, however, despite the cryptocurrency craze that appears to be sweeping the nation.

The BOK report said: “The amount of crypto-asset investment is not really big, compared with other equity markets, and local financial institutions’ exposure to possible risks of digital assets is insignificant… Against this backdrop, we expect crypto-assets to have a limited impact on the South Korean financial market.”

While this may not be considered to have a significant impact nationally, South Korea virtual currency trading accounted for approximately 12% of global crypto-trading volumes, making the nation a powerful market force internationally.

New classification system

Local media portal The BChain provided a detailed report that delved into the present details of the new crypto and blockchain classification system for the industry, which is broken down into ten categories including decentralized applications, blockchain systems, and cryptocurrency exchanges.

On 10 July, South Korea will begin enforcing the anti-money laundering banking rules on cryptocurrency settlements created by the FSC. Banks and other financial institutions in the country are to be obliged to carry out due diligence procedures for crypto-exchanges to their non-client accounts, as well as share overseas digital trading platform information with the FSC, and immediately stop suspicious crypto-transactions.

By the end of July, the government is expected to announce the final draft for the new regulations after it has conducted opinion research from more than 160 institutions. The survey on the nascent industry this year will provide data that is expected to be a positive and prominent guide for blockchain and cryptocurrency regulation.


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Image Courtesy: Pixabay

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