Bank of Korea calls for institutional issuance of crypto ICOs, signaling end to ban
The Bank of Korea (BOK) has signaled a change in its stance regarding the domestic issuance of new cryptocurrencies through initial coin offerings (ICOs) after years of banning the initiative.
In this line, the institution notes, through the proposed Digital Asset Framework Act, that there is a need to institutionally allow local cryptocurrency ICOs for traded digital assets such as Bitcoin (BTC), South Korean News Sale Infomax reported on August 29.
It is worth mentioning that the proposed regulation will usher in clarity in the sector, considering that in the past most domestic entities established companies abroad to issue new cryptoassets and then list them on domestic trading exchanges.
“In the future, when the framework law on digital assets is adopted, it is necessary to institutionally allow domestic cryptographic assets ICOs. The effect of making it possible to prepare a protection device is also expected,” the bank says.
The regulator emphasized that the purpose of the regulation is to protect consumers and increase the transparency of crypto-related transactions. However, BOK noted that the regulations should not stifle innovation in the blockchain sector.
“A balanced approach is needed to promote a healthy market through the introduction of a regulatory system for cryptoassets to promote innovation of blockchain and cryptoassets without hindering the development of related industries due to excessive regulation,” BOK added.
Sophisticated rules for stablecoins
The regulatory proposals come months after the controversial Terra (LUNA) ecosystem crash, a matter the country’s authorities are still investigating. In particular, the BOK stated that the regulation of stablecoins should be sophisticated in relation to recommendations made under the European Union Crypto Asset Market Act (MiCA)
“In Korea, recently, considering that users suffered a lot from the Luna-Terra incident, it is necessary to adopt MiCA-level regulations for stablecoins,” the bank said.
As reported by Finbold, after the Terraform Labs collapse, South Korea established a Digital Assets Committee tasked with creating regulations and overseeing the crypto sector until the proper governing body is formed under the Digital Asset Framework Act.
But according to BOK, the role of crypto regulations and supervision should be taken care of by the central bank and the monetary authority.
