After years of banning the domestic issuance of new cryptocurrencies through initial coin offerings (ICOs), the Bank of Korea (BOK) has signaled a change in stance. In this sense, the proposed framework law on digital assets highlights the need to institutionally authorize the local cryptocurrency ICO for digital assets traded as Bitcoin (BTC), according to the website of News
South Korean Infomax on August 29.
It should be noted that the proposed rule will bring transparency to the industry, as most domestic entities set up companies overseas to issue new crypto assets and then list them on domestic exchanges.
“Going forward, when the Digital Assets Framework Law is enacted, there will be a need to institutionally license ICOs of domestic crypto assets. The effect of enabling the preparation of a protective device is also expected,” the bank said.
The regulator stressed that the purpose of the regulation is to protect consumers and improve the transparency of transactions related to cryptocurrency. The BOK, on the other hand, said the restrictions should not hamper innovation in the blockchain sector.
“A balanced approach is needed to promote a healthy market through the introduction of a cryptocurrency regulatory system to promote blockchain and cryptocurrency innovation, without hampering the development of related industries. due to over-regulation,” BOK added.
The regulatory suggestions came months after the controversial Terra Ecosystem (LUNA) disaster, which is still under investigation by authorities in the country. Notably, the BOK pointed out that stablecoin laws should be more advanced than the recommendations given by the European Union Crypto Asset Market Act (MiCA).
“In Korea recently, since users suffered a lot from the Luna-Terra incident, it is necessary to adopt MiCA-level regulations for stablecoins,” the bank said.
South Korea has established a Digital Assets Committee to develop rules and monitor the cryptocurrency industry until the relevant government body is constituted under the Digital Assets Structure Act. However, the role of rules and supervision of cryptocurrencies, according to the BOK, should be handled by the central bank and monetary authorities.
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Bank of Korea allows trading of cryptocurrency ICOs in the country | PortalCrypto
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