The South Korean government is preparing a legal framework to regulate the cryptocurrency market. The bill will come into force in 2024.
The new South Korean administration, led by Yoon Suk-yeol, has prepared the legal and regulatory framework for the Digital Assets Act next year. The law is scheduled to take effect in 2024. The local media writes about it.
South Korea’s new government has identified passing a law to regulate the crypto market and reviewing the direction regarding the creation of a central bank digital currency (CBDC) as its priorities.
According to last year’s statistics, the crypto market in South Korea is growing rapidly, even despite regulatory restrictions. Thanks to legal and regulatory transparency, the government believes that crypto regulation will allow the market to grow even faster.
Yoon Suk-yeol’s administration believes that the enactment of the Digital Assets Act will strengthen the connection between cryptocurrency exchanges and banks by expanding financial institutions that provide user verification services for virtual transactions.
The new government has also decided to revise the Bank of Korea Act and specifically approved creating a central bank digital currency (CBDC). Based on the results of the current CBDC study, which is expected to be completed by mid-2022, the administration is preparing to hold further consultations with the organizations involved and possibly launch the pilot project.
The bill on digital assets will also affect the regulation of the non-fungible token (NFT) market and create conditions for ICOs, which the Financial Services Commission completely banned in 2018 due to a spike in fraudulent projects.
The government has not yet provided details regarding the specifics of the regulation, but it is expected to accelerate the integration of digital assets into the country’s financial system. Before the law is formally adopted, Korean authorities have agreed to cooperate with the Bank for International Settlements (BIS) and the Financial Stability Board (FSB), as well as American and European observers.
Recall that in February this year, South Korea was going to allocate ~$1.8 billion to develop the metaverse, and the South Korean chaebol SK Group announced plans to issue their own cryptocurrency.
