South Korea Ready to Work on Regulations for Cryptocurrencies Following G-20 Standards
All over the world, countries are working in order to create regulations around cryptocurrencies and related activities. This time, the South Korean financial watchdogs will be easing regulations on cryptocurrency and crate better policies to support the sector.
The information has been revealed by The Korea Times on July the 6th, 2018, and informs that the country will be following the G-20 demands to establish regulations on the cryptocurrency world.
New Crypto Guidelines In South Korea
The Financial Supervisory Service (FSS) and he Financial Services Commission (FSC), in charge of overseeing financial policies in the Asian country, have revised their guidelines related to cryptocurrency exchanges.
According to the report, government officials are not opposed to cryptocurrencies and blockchain technology, but instead, they are worried about illegal activities. And this is the point they want to attack.
The publication quoted a government official saying:
“Establishing unified rules is a complicated issue given the broader range of assessments between government agencies. This is why the country needs close international cooperation as it is still in the early stages of fine-tuning guidelines.”
At the same time, people working at the FSC and FSS explained that the government is pessimistic in the future of Initial Coin Offerings (ICOs) which have been banned the last year. The have also stated that it is difficult to value them as financial assets. The intention is to classify them as ‘non-financial products,’ because of their speculative nature.
There are some countries that have decided to open their boundaries for cryptocurrency and blockchain companies to settle their operations there, including Malta, Bermuda and Switzerland. But some others have taken stricter rules to control the market and avoid criminal activities to spread.
Without regulations the market would be full of parties that would influence the prices, perform illegal activities and scam customers. And of course, governments cannot just introduce hard regulations, but instead, it is necessary to create proper gradual regulations.
At the moment, cryptocurrency exchanges in the country have over $1,8 billion dollars, but it is still small compared to the financial market in South Korea. These numbers change depending on the analysis behind them. Some other companies believe that due to the different expansion plans carried out by crypto companies the funds stored by crypto exchanges may be even higher.
“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,” reads the report.
Back in March, the G-20 summit signed a document that suggest countries to follow FATF standard regulations and apply them to virtual currencies and similar assets.