South Korea To Issue Comprehensive Institutional Crypto Investment Guidelines, Plans To Lift De Facto Ban

South Korea’s financial watchdog plans to issue comprehensive guidelines for institutional cryptocurrency investment. The Financial Services Commission (FSC) announced these plans on Wednesday. 

The guidelines aim to lift the de facto ban on institutional crypto investment. They will provide a framework for public companies and professional investors. 

The new measures will help integrate crypto assets into traditional financial markets. This step is seen as crucial for the country’s evolving crypto landscape.

A Timeline for Different Participants

The FSC said that guidelines for public companies and professional investors will come out in the third quarter. In contrast, non-profit organizations and crypto exchanges will receive their guidelines as soon as April. 

This staged approach reflects the varied needs of each group. The authorities plan to release stablecoin rules and a legal structure for token securities. 

This action is intended to create a more secure environment for crypto investments. The move is part of a broader effort to align with global regulatory trends.

Building a Healthy Crypto Market

During a March 12 meeting with local industry experts, FSC Vice Chairman Kim So-young explained the plan. He said the new guidelines are not just about changing laws. 

They are meant to change practices in the market. The task force will focus on best practices for institutional crypto investment. Kim stressed that the guidelines will include standards for crypto trading. 

They will also cover disclosure and reporting practices. These changes are seen as necessary to build a healthy market. The FSC has taken steps to open the market gradually. Earlier this year, the commission announced a roadmap for corporate participation in the crypto market.

The Impact on South Korea’s Crypto Scene

South Korea is known for its active retail crypto market. By the end of November 2024, about 15.6 million people traded crypto in the country. This new initiative could further boost liquidity in the market. 

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It also paves the way for greater institutional participation. Many experts believe that institutional involvement will drive growth. The guidelines will help build trust and improve market integrity. 

They are expected to enhance investor confidence. South Korea aims to follow global trends while protecting public interests.

Addressing Global Influences

The plan comes amid global discussions on crypto regulation. Kim mentioned that efforts are speeding up worldwide. He noted that discussions in the United States have influenced these plans. 

The U.S. push for global crypto standards has accelerated regulatory changes. South Korea now joins other nations in modernizing its crypto rules. 

The country is moving away from strict opposition to crypto asset exposure in traditional finance. The new guidelines mark a significant policy shift. They highlight the nation’s willingness to embrace innovation.

Strengthening Market Protection

Earlier in March, the Financial Intelligence Unit revealed plans to launch a joint response team. This team will target AML crimes in crypto. It will work with the Financial Supervisory Service and financial institutions. 

This effort aims to protect public livelihoods. It is part of a broader initiative to strengthen market oversight. The upcoming guidelines will complement these efforts. They will set clear standards for crypto investments. Regulators hope these measures will reduce risks for investors.

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