The Korea Times has reported that South Korean regulators are about to ease cryptocurrency regulations in line with G20 recommendations.
Back in May, government regulators made an initial agreement to apply the G20’s “unified regulations” and classify digital currencies as assets, having agreed that the situation regarding the trading of cryptocurrencies needed improving.
It appears according to the Korea Times report that the Financial Services Commission (FSC) has now revised its guidelines for cryptocurrency exchange operators. A government official commented about the latest developments:
“The FSC made revisions to its rules to apply strengthened policies in order to prevent or detect money laundering and illegal activities because the regulator isn’t opposed to cryptocurrencies.”
Another official commented that adopting the recommendations are in the “early stages of fine tuning” but that the establishment of unified rules has its complications.
The loosening of South Korea’s current cryptocurrency regulations illustrates the degree to which the government sees the value of blockchain and acknowledges the growth of cryptocurrency in the country’s financial sector. However, security issues still remain a concern to the government. A Trade ministry official commented on this aspect of the current changes to legislation suggesting that changes would be made, “but not at the expense of safety and security.”
The government’s gradual shift towards cryptocurrency adoption will certainly give a lift to the industry in South Korea. Mainstream adoption, if it comes, will have a massive impact providing it moves beyond speculative trading, says Seoul-based technology journalist National Tax Agency:
“Global banks predict that interest in cryptocurrencies will double. We believe an increase in adoption will come when crypto-assets can be used as actual currencies rather than just speculative investments.”
Hong Eu-rak of the ruling Democratic Party has suggested that there are current discussions in the progress to lift the country’s ban on ICOs, and it has also been reported that further discussions with the National Tax Agency to develop a taxation framework for cryptocurrencies is underway.