South Korean President Yoon Suk-yeol will make good on his promise to properly regulate cryptocurrencies to encourage innovation and responsible development.
Yoon Suk-yeol, the current president of South Korea, has indicated that cryptocurrencies will be regulated and institutionalized in the country within the next two years.
The administration of Yoon Suk-yeol, who has been president since last March, is working on a new regulation that will allow the country to regulate cryptocurrencies in a more friendly way, in order to integrate crypto assets into its institutional system.
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The Cryptocurrencies and NFT tokens played a central role during Yoon Suk-yeol's presidential campaign, which promised to work to lift the excessive and unreasonable bans and regulations that exist for crypto assets in the country.
In keeping with this promise, President Yoon Suk-yeol announced the creation of a new regulatory framework, which will allow the crypto industry to develop in a healthier and more responsible way.
South Korea wants to adapt to new technologies to boost innovation and strengthen its leadership as a world-renowned technology centre.
New legislation to regulate cryptocurrencies
South Korea's Digital Assets Basic Law, which will be implemented in 2024, aims to promote cooperation between the nation's government entities, banks, and financial institutions, with the goal of Include cryptoassets in the institutional system, revealed the local media Kmib.
President Yoon Suk-yeol, who is spearheading the new regulation, included the Digital Assets Basic Law in his National Implementation Plan, which lists a total of 110 policy goals to be developed for the nation. The Korean administration will push the bill through the National Assembly for enactment between the end of this year and 2023. He also noted that the goal with the Digital Assets Basic Law is for it to come into effect in South Korea in 2024.
A new digital system attractive to investors
One of the most important points detailed in Korea's new crypto bill is the Building a digital system and infrastructure that is able to guarantee the security and integrity of users, to attract new investors and participants to the crypto industry.
Traditional banking will also be integrated with the cryptocurrency industry, according to Yoon Suk-yeol's plans and the new regulatory proposal. This is in order to create a relationship between both systems at an internal level and expand the number of institutions that can operate and provide services to citizens with digital assets.
Currently, only four companies are operating with cryptocurrencies in South Korea. Most crypto exchanges and trading platforms closed their offices in the country in the third quarter of 2021, after the government of the time announced new and strict registration processes.
On the other hand, the Korean president wants to remove the unreasonable regulations that currently exist on cryptocurrencies but without risking the security of investors, so the new regulation will include compliance with AML regulations that help minimize the risks of financial crimes and other illicit activities.
Thus, South Korea will open the door to initial coin offerings, known as ICO, banned in 2018 due to a massive wave of fraud and scams.
NFTs and CBDCs in Korean crypto regulation
As mentioned at the beginning, NFTs played a major role in the current president's election campaigns, so the crypto regulation his administration is preparing will include NFT tokens and also CBDCs.
South Korea's central bank is focused on creating its own digital currency CBDC to optimize its financial system. In January of this year, the entity successfully completed its first test pilot, where it focused on the issuance of digital currency.
The second phase of testing or pilot that the South Korean Central Bank has started and which ends in the middle of this year is focused on retail and offline payments, as well as cross-border transactions with digital currency.
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