The South Korean Financial Services Commission (FSC) has created the Financial Innovation Bureau to oversee its burgeoning crypto sector.
The new approach to cryptocurrencies has been developed to ensure consumer protection and help the country keep pace with evolving financial innovation.
The announcement of the new division follows a turbulent strategy from the South Korean regulators. Last month South Korea’s Supreme Court ruled that bitcoin is a legally recognizable asset, overturning an earlier decision from a lower court, and last week, South Korea brought in new anti-money laundering rules for cryptocurrency settlement.
The creation of the Financial Innovation Bureau will help nurture South Korea’s digital industry. It will be tasked with scrutinizing policy initiatives for financial innovation, such as financial services using fintech or big data, and responses to new developments and challenges such as cryptocurrencies.
The softening stance on crypto aligns the country with the G20’s goal of “unified regulations,” and follows a report from the Financial Stability Board, which concluded that cryptocurrency assets “do not pose a material risk to global financial stability.”
Industry observers welcome the development. In a press release the South Korea-based FANTOM Foundation said: “I think Korea can be an ideal incubator to test drive new virtual coins and their blockchain systems.” Also stating:
High-speed internet infrastructure is already here, unparalleled to any other country in the world. And the Korean people are very adoptive of technology. Now it is the government’s role to establish a favourable environment for virtual coins and their blockchains.
South Korea is an important market for cryptos’ it has rapidly become a significant cryptocurrency hub and is home to Bithumb, one of the world’s largest crypto exchanges. Bithumb is pushing a global expansion strategy recently opening an office in London and establishing a subsidiary in Singapore.