South Korea’s Financial Regulator To Create Cryptocurrency Department

News, Regulation | July 23, 2018 By:

South Korea’s Financial Services Commission (FSC) will be establishing a new department exclusively for policymaking initiatives in the country’s blockchain and crypto industry.

Last week, the FSC said that it will undergo a “major organizational restructuring,” adding that it plans to create a temporary body, called “Financial Innovation Bureau,” to strengthen financial consumer protection and effectively respond to financial innovation resulting from the Fourth Industrial Revolution. The new department will help nurture Korea’s FinTech industry, mostly covering the nation’s cryptocurrencies and blockchain technology.

“The new Financial Innovation Bureau will also be tasked with policy initiatives for financial innovation, such as innovating financial services using FinTech or big data, and responses to new developments and challenges such as cryptocurrencies,” an FSC official said.

The decision to set up a temporary department is in line with the Financial Stability Board’s (FSB) recent report that claimed cryptocurrencies “do not pose material risk to global financial stability.” But the FSB still recognizes the need for vigilant monitoring in light of the speed of market developments.

In September 2017, the FSC prohibited domestic companies and startups from participating in initial coin offerings (ICO). In May of this year, however, the country’s National Assembly pushed for the removal of the ban, officially proposing legislation to permit ICOs as long as investor protections are put in place. The National Assembly also called on the government to form a task force to “improve transparency of cryptocurrency trading and establish a healthy trade order.”