The Bank of Korea (BOK) recommends the government to allow initial coin offerings (ICOs) within the country, which were banned in 2017.
The South Korean central bank reviewed the EU bill to regulate the crypto market (MiCA) and its alleged impact on the cryptocurrency market. After that, the BOK representatives released a series of recommendations to the Korean government, including the possibility of resuming ICOs within the country and ensuring the regulation of stablecoins. This was reported by the local media.
According to the BOK representative, the MiCA bill protects users and investors without hindering innovation. This is the regulatory framework the Korean government should seek to develop to “foster a sound market” without “excessive regulation” on related industries.
The Bank of Korea reported that even though ICOs have been officially banned in the country for five years, the government cannot control the issuance of new coins outside the country and their subsequent listing on local crypto exchanges.
If the European Parliament passes the Markets in Crypto-Assets (MiCA) bill, the Korean government may again allow ICOs to boost the industry. However, domestic ICOs should be subject to regulatory oversight. According to the BOK, the central bank should act as a regulator as it is the main monetary authority in the country.
The BOK also believes that, first of all, it is necessary to adopt a regulatory framework for monitoring stablecoins, citing the consequences for investors after the Terra collapse. The BOK officials hope that the central bank will become the regulator for this asset class.
The South Korean government is preparing a regulatory framework to control the cryptocurrency market. The bill is scheduled to take effect in 2024. Meanwhile, the Financial Services Commission (FSC) of South Korea is working on several policies to help protect investors before the main law comes into force.
