South Korea is one step closer to legitimizing blockchain in the country. The South Korean government has reportedly begun drafting a series of new industry classification standards to govern the country’s blockchain sector.
On track to unify blockchain
Specifically, three Korean government ministries are working together to finalize the classification scheme for the new blockchain industry. The Ministry of Information and Communication, the Ministry of Science and Technology, and the National Statistics Office are expected to produce the final draft by the end of July 2018.
The scheme will help provide the basis for formulating policies regarding the “promotion of blockchain and regulatory frameworks.” It will also cover areas such as cryptocurrency exchanges, transactions, decentralized application development (DApps), and building blockchain systems. The draft will also classify cryptocurrency exchanges as a crypto asset exchange and brokerage. This is very important as crypto exchanges were previously considered “communications providers”. Now, they can be considered regulated financial institutions.
Facilitate blockchain regulations
Things are looking up for blockchain as the South Korean government aims for a more relaxed approach. Previously, the Financial Services Commission (FSC) imposed a ban on ICOs, as officials were concerned about the adverse effects of cryptocurrencies, going so far as to say that cryptocurrencies could corrupt the nation’s youth.
FSC considers itself the Korean regulatory authority that oversees blockchain policy. It is also the governing body of the Financial Supervision Service (FSS), which has since reconsidered its cryptocurrency regulatory policy.
“FSC made revisions to its rules to apply strengthened policies to prevent or detect money laundering and illegal activities because the regulator is not opposed to cryptocurrencies,” an official The Korea Times quoted as saying.
“Establishing unified rules is a complicated issue given the wide range of evaluations between government agencies. That is why the country needs close international cooperation, as it is still in the early stages of adjusting the guidelines,” said another official.
That said, South Korea is reportedly following the policies set out by the nations of the G-20, an international forum for governments and central bank governors. The main financial policy makers of the G-20 member countries have agreed to recognize and regulate cryptocurrencies as financial assets. While South Korea has yet to do the same, its move to loosen regulations on cryptocurrencies will likely be beneficial to other nations that are approaching the blockchain industry, as major exchanges now seek to expand further into international markets in plans to offer blockchain. services based in the Asian region.