The Bank of Korea (BOK) has signaled a change in its stance on new domestic issuance crypto currency through an initial coin offering (ICO) after a year of banning the initiative.
In this line, the institution, through the proposed Digital Assets Framework Act, notes that there is an institutional need to allow local cryptocurrency ICOs for digital assets traded like Bitcoin (BTC), a South Korean news outlet Infomax reported on August 29.
It is worth mentioning that the proposed regulation will bring clarity to the sector, because previously, most domestic entities created companies abroad to issue new crypto assets and then list them domestically. trade exchange.
“In the future, when the Framework Act on Digital Assets is implemented, it is necessary to allow the ICO of domestic cryptographic assets institutionally. The effect of setting up protective devices is also expected,” said the bank.
The regulator emphasizes that the purpose of the law is to protect consumers and promote transparency of crypto-related transactions. However, BOK noted that these regulations should not prevent innovation in the blockchain sector.
“A balanced approach is needed to develop a healthy market through the introduction of a regulatory system of crypto assets to promote blockchain innovation and crypto assets while not hindering the development of related industries due to excessive regulation,” BOK added.
advanced regulations for stablecoins
The proposed regulation comes months after the controversial Terra (LUNA) ecosystem disaster, a matter that is still being investigated by the state authorities. In particular, the BOK stated that the regulations for stablecoins should be sophisticated compared to recommendation created under the European Union Market in Crypto Assets Act (MiCA)
“In Korea, recently, considering that users suffered a lot from the Luna-Terra incident, it is necessary to use MiCA level regulations for stablecoins,” said the bank.
As reported by Finboldafter Terraform Labs collapsed, South Korea establish a Digital Assets Committee tasked with creating regulations and overseeing the crypto sector until an appropriate government agency is formed under the Digital Assets Framework Act.
However, according to BOK, the role of crypto regulation and supervision should be handled by central banks and monetary authorities.