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Top Cryptocurrency News: Bank of Korea Calls for Institutional Issuance of Crypto ICOs, Signaling an End to Bans

29-Aug-2022 By: Rohit Tripathi
Top Cryptocurrency N

After years of prohibiting the domestic issuance of new cryptocurrencies via initial coin offerings (ICO), the Bank of Korea (BOK) has signaled a shift in its stance.

In this line, the institution, through the proposed Digital Asset Framework Act, recognizes the necessity to institutionally authorize local cryptocurrency ICO for traded digital assets such as Bitcoin (BTC), reported a local media outlet on August 29.

It is worth noting that the proposed regulation would bring transparency to the industry since most domestic firms previously established companies abroad to issue new crypto assets and then list them on local trading exchanges.

“When the Framework Act on Digital Assets is passed in the future, it will be required to institutionally authorize domestic cryptographic asset ICOs. The effect of making it feasible to create a defensive device is also envisaged,” the bank said.

Need to promote innovations 

The regulator emphasized that the regulation's goal is to safeguard consumers and improve the transparency of cryptocurrency-related transactions. BOK, on the other hand, stated that the restrictions should not inhibit innovation in the blockchain sector.

“A balanced approach is required to maintain a healthy market through the implementation of a crypto asset regulatory structure that promotes blockchain and crypto asset innovation without impeding the development of connected sectors,” BOK added.

Sophisticated regulations for stablecoins

The regulatory suggestions came months after the controversial Terra (LUNA) ecosystem collapse, which is currently being investigated by the country's authorities. Notably, BOK emphasized that stablecoin regulations should be more advanced than the proposals given under the European Union Crypto Asset Market Act (MiCA).

In Korea, the bank recently stated that “because customers suffered greatly from the Terra-Luna collapse, MiCA-level regulations for stablecoins are required.”

As reported by CoinGabbar, following the bankruptcy of Terraform Labs, South Korea established a Digital Assets Committee entrusted with drafting rules and regulating the crypto sector until the right government body is constituted under the Digital Asset Framework Act.

However, the function of crypto regulations and monitoring, according to BOK, should be undertaken by the central bank and monetary authorities.

Read also: Top Cryptocurrency News: Dubai Regulator Releases Standards for Virtual Assets Marketing and Advertising

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