Protect without Forbidding – South Korea, like many other countries, is at a crossroads. The new paradigms inherent in cryptocurrencies are challenging the confidence of financial regulators around the world. How to regulate staking? Lending? Stablecoins? This is a completely new ecosystem that needs to be understood and regulated without limiting or destroying it. Welcome to a new world with legal boundaries that are still vague as hell.
South Korea wants to protect consumers…
A boiled cat is afraid of cold water, as they say. The Terra Luna case was indeed disastrous for South Korea’s image. The whole world has turned its eyes to the ancestral home of what will become the trigger of the most serious existential crisis in the cryptocurrency industry. After that, the authorities decided to take matters into their own hands.
Last June, the government announced the creation of a Digital Assets Committee to monitor the sector. And to complete the measure, financial regulators across Asia and the Pacific have been asked to work together to avoid another disaster. Financial Services Commission Chairman Kim Joo Hyun told local media that “a task force made up of private experts and government departments will quickly review cryptocurrency legislation.”
The goal is to quickly propose “13 digital asset and investor protection bills” to the country’s National Assembly. Bok Hyun Lee, head of the Financial Supervisory Service, adds:
“We will spare no effort to support self-regulation (…) until public rules are adopted in the future. »
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…without hindering innovation or economic activity
But for the sake of balance and respect for economic activity, the Chairman of the Commission has made it clear that he does not want to “impede technological development.” Hence the importance of paying special attention to the “education sector” to educate the public in these new ways of investing.
On August 11, the National Assembly held the opening ceremony of the Special Committee on Digital Assets. From words to deeds, the land of the morning calm began its small regulatory revolution, guided by the following leitmotif:
“Take a balanced approach to blockchain development, investor protection, and market stability.”
Finally, in conclusion, know that South Korea does not intend to stop there. Cointelegraph media had access to an internal government working paper. It will set the year 2024 to create a comprehensive regulatory framework for cryptoassets. Titled “Basic Law on Digital Assets,” it should cover all market sectors such as exchanges, stablecoins, or even a future central bank digital currency. This law is one of the 110 tasks that the new president set himself upon coming to power.
Yoon Seok Yeol, who was elected last March, is not a professional politician. A 61-year-old former prosecutor, he has a reputation for being quite conservative and a man of action. The balance between economic development, taxation and consumer protection will not be easy to strike for a country that still lives in the menacing shadow of its restive neighbor to the north.
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