South Korea has adopted new cryptocurrency regulations

Endy Callahan

South Korean leaders of the crypto industry, legal experts, politicians and many others express their opinion on recent amendments to the lawmaking regarding the legalization of blockchain and cryptocurrencies.

As previously reported, back on March 5, the National Assembly approved amendments to the existing law on Finance, including FATF recommendations on crypto. The decision was made unanimously: 182-0 votes in favor.

According to Chosun, Kim Sunga, CEO of the Hanbitco exchange and Chairman of the exchanges Committee of the Korean Blockchain Association :

"The legitimate status of crypto exchanges has been secured. This bill will play a major role in forming a cryptocurrency-based monetary industry."

A new bill will help improve the economy and crypto industry

Korean Blockchain Association’s Head said that this step would help create new jobs, improve the economy, strengthen the digital assets market, and expand the blockchain industry.

A representative of the Korean FINTECH Industry Association said that the new regulation "will not only assist in developing the cryptocurrency and blockchain industries, but will also contribute to the development of the FINTECH industry in a safer environment."

According to "Hanguk Kyungjae":

"[The bill] will contribute to the development of the economy of South Korea  in the long term."

"Chosun" quotes one of the members of Parliament who helped formulate the amendment, Kim Byung-Wook. He said that "the lack of an elementary legal frame" evidently hindered the industry, and noted that the new correction will help the crypto sphere in "guaranteeing transparency and security."

Pessimistic views and prediction on the new law

However, not everybody is happy with what is happening.

One anonymous Executive from the crypto industry voiced his concerns about the new rules that may be too “restrictive and inflexible."

He noted:

"Not everyone can survive this kind of control."

Other members expressed concern about a clause in the improvement that requires all crypto companies to comply with strict banking requirements by using special accounts backed by actual names and public security numbers.

Ku Taeon, a representative of the Law firm Law Lin, said:

"To impose such requirements on the accounts of all crypto firms, especially if they do not trade – is too much."

Ku said that it would be difficult for crypto companies to dispute their position, even if they are not dealing with organizations.

Another representative of the digital assets industry was even more pessimistic:

"I only hope that this novel regulation will not lead to an even larger reduction in the virtual assets market."

Will the new system lead to destabilization of the financial system?

The Central Bank representative stated that the introduction of a state virtual currency could seem right. Industrialized countries can use it to fight monopolization and sustain the stability of the economic infrastructure. Nations with weaker economies may discover that digital asses are useful for improving integration and reducing the prices connected with cash processing, concluded Hong.

The Korean Bank has been unconvinced of the CBDC and has conveyed concern about the improvement of these assets in the past. A document issued in February by the Bank proposed that virtual currencies from the Central Bank could displace financial banks and reduce them, undermining the whole banking system.

In any case, The National Assembly of South Korea expects that the new bill will provide a framework for the legalization and regulation of crypto exchanges and digital acts.