South Korea’s Strategic Shift: Embracing Corporate Crypto Trading
On february 13, the Financial Services commission (FSC) of South Korea unveiled plans to progressively permit corporate entities to participate in cryptocurrency trading.This proclamation signals a phased approach to lifting the existing ban that has restricted institutional involvement in the virtual asset market.
Initial Phase: Opening Up to Select Entities
In the first stage of this initiative, the FSC will authorize law enforcement agencies, non-profit organizations, educational institutions, and universities to liquidate thier cryptocurrency holdings, such as Bitcoin (BTC) and Ethereum (ETH). These entities will gain access to virtual asset exchanges for cashing out purposes during the first half of the year.
By the second half of the year, South Korea aims to launch a pilot program that will enable approximately 3,500 listed companies and corporations to engage in both buying and selling cryptocurrencies. This expansion will extend digital asset trading opportunities to professional investors registered under the country’s Capital Market Act.
ancient Context and Global Trends
Since 2017, south Korea has enforced a ban on crypto trading for corporations and professional entities, primarily to curb speculation, money laundering, and market manipulation. However, the implementation of the Virtual Asset User Protection Act has introduced crucial safeguards for users, paving the way for this strategic shift.
It’s certainly worth noting that this move aligns with a global trend where numerous countries are increasingly allowing corporations to participate in the digital asset market. The growing demand for blockchain-related investments and services necessitates a corresponding evolution in the local market, as highlighted by the regulator.
Formulating a Robust regulatory Framework
To ensure a smooth transition, the FSC intends to establish a task force comprising relevant organizations. This collaborative effort will focus on developing a regulatory framework for internal control standards. Key partners in this initiative include the Financial Supervisory Service, the Korea Federation of Banks, and the Digital asset eXchange Alliance (DAXA).
Engagement with market participants, such as exchanges and industry experts, is also deemed essential to the roadmap for corporate participation in the virtual asset market. This inclusive approach underscores the FSC’s commitment to fostering a secure and regulated surroundings for digital asset trading.
As of the latest data, the global blockchain market is projected to reach $68.02 billion by 2025, reflecting the increasing relevance of cryptocurrencies and blockchain technology in the financial sector. South Korea’s strategic move positions the country as a key player in this rapidly evolving landscape.