The South Korean government is on the verge of passing a new bill to regulate cryptocurrencies.
South Korean lawmakers are set to discuss a new draft Digital Assets Basic Law on Tuesday, aimed at ensuring the security and protection of cryptocurrency investors.
According to The Korea Times, the draft Digital Assets Basic Law to be debated today It could be approved this year by members of the Political Affairs Committee of South Korea’s National Assembly. The outlet reported that the country’s lawmakers are mostly in agreement on the urgent need to regulate the crypto industry to ensure investor protection.
South Korea wants to regulate the cryptocurrency industry
The draft Basic Law on Digital Assets, which will be debated today in the National Assembly, will establish the basis for the regulation of cryptocurrencies in the country.
South Korea has been working to create a new crypto policy, including rules and regulations that promote the protection of crypto-asset users, in order to mitigate potential risks and ensure financial stability.
Following the collapse of cryptocurrency exchange FTX earlier this month and blockchain ecosystem Terra in May, lawmakers have focused even more on the need to create a new regulatory framework for the industry and its participants.
One of the main points that this new bill will focus on is the legalization of cryptocurrency platforms, to establish their duties and ensure the protection of investors. Specifically, the bill will force exchanges to have large reserves to ensure solvency to investors. Likewise, exchanges will be subject to keep the deposited funds of its users in separate accounts, as a measure to prevent any improper and arbitrary use of such funds. Finally, this digital assets bill also stipulates an obligation for exchanges regulated in the country to have insurance, so that they can respond to their investors in the event of unexpected financial damages.
Korean lawmakers demand specific laws for cryptocurrencies
Lawmakers and industry experts in the country have also been calling on the government to establish new detailed laws that prescribe specific duties and obligations for companies and participants in this sector, the Korean outlet reported.
In March, President-elect Yoon Suk-yeol promised to ease the country’s harsh policies on crypto assets to unlock the potential and innovation of digital assets, but without risking investor safety or the country’s financial stability.
NFTs in Korean legislation
South Korea’s digital asset bill includes non-fungible tokens, or NFTs, within the broad definition of “digital asset,” The Korea Times reported.
NFTs were part of President Yoon Suk-yeol's election campaign, when he launched more than 20.000 non-fungible tokens with images and videos of himself, in order to reach out to younger citizens.
In June of this year, the Korean government created a working committee to focus on crypto regulationThe country's president has promised to regulate the crypto industry in the next two years. According to The Korea Times, the possible approval of the Digital Assets Basic Law draft will push Korean lawmakers to strengthen regulation of this growing industry.
Continue reading: South Korea plans to regulate and institutionalize cryptocurrencies in 2024
