South Korea is one step closer into legitimizing blockchain in the country. According to reports, the South Korean government has started drafting a number of new industry classification standards to govern the country’s blockchain sector.
On the road for unifying blockchain
Specifically, three Korean government ministries are working together to finalize the new blockchain industry’s classificatory scheme. The Ministry of Information and Communication, the Ministry of Science and Technology, and the National Statistical Office are expected to produce the final draft by the end of July 2018.
The scheme will help provide the basis for making policies concerning “blockchain promotion and regulatory frameworks.” It will also cover areas such as cryptocurrency exchanges, transactions, decentralized applications (DApps) development, and blockchain systems construction. The draft will also classify cryptocurrency exchanges as crypto asset exchange and brokerage. This is very important as previously crypto exchanges were considered as “communication vendors.” Now, they can be considered as regulated financial institutions.
Easing blockchain regulations
Things are looking up for blockchain further as the South Korean government targets a more relaxed approach. Previously, the Financial Services Commission (FSC) imposed a ban on ICOs, as officials were worried about the adverse effects of cryptocurrencies, going as far as to say that cryptocurrencies might corrupt the nation’s youth.
The FSC is considered the Korean regulatory authority overseeing blockchain policy. It is also the governing body of the Financial Supervisory Service (FSS), which has since reconsidered its cryptocurrency regulatory policy.
“The FSC made revisions to its rules to apply strengthened policies in order to prevent or detect money laundering and illegal activities because the regulator isn’t opposed to cryptocurrencies,” The Korea Times quoted an official.
“Establishing unified rules is a complicated issue given the broader range of assessments between government agencies. This is why the country needs close international cooperation as it is still in the early stages of fine tuning guidelines,” claimed another official.
That being said, South Korea is reportedly following the policies set by the G-20 nations, an international forum for governments and central bank governors. Top financial policymakers of 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 ease cryptocurrency regulations will likely become beneficial to other nations that are warming up to the blockchain industry, as major exchanges are now looking to expand further into international markets in plans to offer blockchain-based services in the Asian region.