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South Korea's New Digital Assets Committee to Enhance Crypto Regulations

Key Takeaways
  • Bank of Korea can investigate crypto-related businesses
  • The financial regulator FSC has the final say on regulating digital assets
  • New Digital Assets Committee will review regulations and draft new laws
24-Apr-2023 By: Ashish Sarswat
South Korea's New Di

South Korea's Bank of Korea granted the power to investigate crypto-related businesses, Digital Assets Committee formed to draft new laws

South Korea's Bank of Korea (BoK) has been given the power to investigate cryptocurrency-related businesses in the country. This move comes amid discussions on virtual asset legislation in South Korea. However, the financial regulator, the Financial Services Commission (FSC), will have the final say in governing the regulation of the digital asset sector, causing a disagreement between the two organizations.

The BoK has been granted the authority to address concerns related to the potential risks to financial stability from stablecoins. Cryptocurrency exchanges can also be required to provide transaction data upon request. The FSC has issued a warning that if the central bank takes control over regulating cryptocurrencies, it will indicate that digital assets are on par with traditional finance.

To address this issue, the Financial Supervisory Service of South Korea created a new investigative body called the Digital Assets Committee, responsible for reviewing the current cryptocurrency regulations in the country and identifying any regulatory gaps. The committee will also draft new laws to ensure that the cryptocurrency market is regulated effectively.

South Korean Government Faces Disagreement Over Cryptocurrency Regulation between Central Bank and FSC

South Korea's government has been working to promote cryptocurrency legislation, but disagreements between the central bank and the FSC have arisen over who should be in charge. However, a meeting is expected to expedite the implementation of South Korea's virtual asset laws.

According to Kim Han-gyu, a Democratic Party legislator who introduced South Korea's Crypto Assets Act, the Financial Services Commission acknowledges the importance of granting the Bank of Korea the authority to request data, but it is hesitant to incorporate it into the proposed legislation. 

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