South Korea is planning to relax its policies on cryptocurrencies in order to comply with the G20 to create “unified regulations”, according to The Korea Times.
The policymakers of the G20 established July as a deadline for taking the initial step toward uniform regulations because they notice them as “too small to jeopardize”’ financial markets.
The Financial Services Commission (FSC), which monitor policies and directs the Financial Supervisory Service (FSS), has amended its guidelines in relation to “all activities” of Korea’s key cryptocurrency exchange operators.
An official from the country’s Financial Services Commission (FSC) stated that the regulation is not against cryptocurrencies and has made revisions to strengthen its policies to counter money laundering among other illegal activities.
Another official has said:
“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.”
A trade ministry official stated that a sudden reversal in policies in highly improbable but the government believes that an eventual shift of attitude towards cryptocurrency is required. The country needs to focus more on blockchain technology once it gains an insight of the “possible flipside” of cryptocurrency trading, he noted.
The country’s National Assembly has also presented a plan to allow the previously banned ICOs. FSC and FSS will not endeavour to change the government’s stance on crypto or digital assets as it’s difficult to value them as “financial assets”.
The Ministry of Strategy and Finance is still discussing with the National Tax Agency on a taxation planning for cryptocurrencies, the trade official said, even though the plan has missed out its June deadline.
The country recently identified crypto exchanges as regulated financial institutions and has agreed to segregate them as “cryptocurrency exchanges and brokerages” enabling such platforms to do business with local government support. The new framework called for a stricter KYC and AML policies which could adversely impact such platforms.
Under the country’s plan to regulate local cryptocurrency exchanges, the FSC has demanded the investigation three big banks that played an active role in providing virtual accounts and banking services for such institutions.
Kim Byeong-yang, a Seoul-based technology journalist, told The Korea Times
“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.”