South Korea Unlikely to Legislate Crypto Regulations Before the U.S – Says FSC

Richard M. September 21, 2022 3 minute read

South Korea’s Financial Services Commission focuses the cryptocurrency legislation. According to BIS, international cooperation is important for central bank digital currencies (CBDCs).

The financial watchdog of South Korea discussed crypto regulatory measures. An important point was highlighted that law establishment for the supervision of the cryptocurrency industry is not easy in the country ahead of a common global regulatory framework, as cross-border imposition will be another efficiency factor.

The developing cryptocurrency legislation is the point of focus for South Korea’s Financial Services Commission (FSC). It expresses concerns over new crypto regulation.

According to local media, FSC’s Financial Innovation Division’s Park Joo-Young said, “There may be a feeling of urgency due to [concerns over] regulatory void, but it is important to create a regulatory framework that has international consistency,”

Expressing his views, Park said, “Until international consistency is achieved, it will be difficult for [Korea] to create a regulatory system in solitary.”

According to Bank for International Settlements (BIS), international cooperation is the main factor in central bank digital currencies (CBDCs). As per the report, central banks that don’t work with CBDCs should consider cross-border functionality as the early design stage.

Park’s comment challenges the initiative taken by South Korean president Yoon Suk-yeol to institutionalise digital currencies speedily. Yoon’s administration plans to have the legislation in the next year that will go into effect in 2024.

FSC representative explained that since the bill has not been finalized yet, initiating building the framework is not so easy because already 14 cryptocurrencies-related bills are pending in the National Assembly.

Park stated, “MiCA (Markets in Crypto-Assets) is not yet finalized and is expected to take a year and a half to two until going into effect, and the U.S. also does not have the relevant regulation.”

Park explained that multiple issues might arise without international consistency. Such as regulatory arbitrage from firms of cryptocurrency that use gaps in laws of a specific country to operate there. Ultimately, it will affcet global investors.

Since Yoon has been elected as President in May, a great deal of discussion can be seen surrounding cryptocurrencies promotion in South Korea where most of the citizens are crypto users.