Earlier this month, South KoreaThe financial regulator indicated it was considering introducing new rules that would allow institutions to hold digital assets. The sector welcomed the news as it would add liquidity and further legitimize the industry.
But that one The Financial Services Commission (FSC) has changed its tunesays it needs more time to consider the implications of the decision.
The FSC’s virtual asset committee met this week to discuss priorities for the year, and according to The Korea Times, allowing corporate accounts was not on the agenda. The paper says the committee decided a “more thorough review” was necessary before making the decision.
The committee is chaired by FSC Vice President Kim So-young and is made up of industry experts and government officials from relevant ministries. But despite the postponement, the FSC is expected to follow up later this year and reduce barriers for corporate accounts to trade in digital assets.
“The issue of allowing accounts for businesses, which was discussed earlier, has undergone extensive review through 12 discussions in subcommittees and working groups. The policy review process is nearing completion. We will report the results soon and proceed with subsequent steps promptly,” Kim said .
Beyond liquidity and mainstream adoption, companies’ entry into the digital asset world would expand digital currency payment options in the country. While South Korea is one of the world’s largest hubs for digital assets (30% of South Koreans have invested in digital assets), most activity is limited to speculative trading. Digital payments, which was originally intended for Bitcoin to solve, has taken a back seat.
While the committee did not provide new direction on corporate involvement, it delved into consumer protections, focusing on a new law that went into effect last July. The first phase of the new law focused on protecting investors, protecting deposits and cracking down on illegal market practices.
The committee is now discussing how to implement the second phase of the law, Kim revealed.
“A comprehensive and systematic approach that encompasses businesses, markets and users is necessary,” he noted.
He added that the committee is too looking at stablecoinswhich has become the main focus of regulators globally. In the EU is Crypto asset markets (MiCA) framework has cracked down on stablecoin issuers, forcing some, like Tether, to consider scaling back after failing to obtain the new license. Several other jurisdictions, from Cambodia to Hong Konghas also implemented safeguards to police the sector.
South Korean exchanges are already feeling the heat from the renewed regulations. the country’s largest stock exchange, Upsetfaces possible sanctions and fines for alleged KYC violations. A disciplinary hearing with the FSC’s Financial Intelligence Unit is scheduled for Tuesday, January 21.
Thailand targets digital asset payments in tourist areas
Elsewhere in Asia, the Thai government plans to launch digital asset payments in one of the popular tourist destinations this year.
Deputy Prime Minister Pichai Chunhavajira recently uncovered government plan to operate digital asset payments in Phuketan island province in southern Thailand. Phuket is one of Thailand’s biggest tourist hubs and welcomed 4.3 million tourists in the first half of 2024.
Chunhavajira, who also serves as finance minister, says digital asset payments would make it easier for foreign tourists to pay for local goods and services without going through the exchange process.
To deposit digital assets, tourists must verify their identity through exchange-based KYC. The payments will be limited to the scope of existing laws and will not need any new rules, the deputy prime minister said. This makes implementation easier and faster.
Digital assets are very popular in Thailand. According to Chain analysisabout 18% of Thais owned digital assets in 2023, ranking 10th globally for adoption that year.
Chunhavajira says digital asset payments can make it easy for foreigners to invest and settle in Thailand.
“For example, those who fled the war between Russia and Ukraine and settled in Phuket may find it difficult to get 50 million baht to buy a house. But paying with BTC can be a much easier process,” he said.
While noble, the plan to drive digital asset payments is only possible if Thais turn to digital assets with low fees and instant transactions, which BSV offers. BTC’s exorbitant fees, small blocks, and slow block confirmations make it impractical for daily payments.
Beyond payments, Thailand wants to follow the US and approve a spot BTC ETF. SEC Secretary General Pornanong Budsaratragoon said the agency wants the Southeast Asian nation to remain competitive as regional financial hubs such as Singapore and Hong Kong push similar initiatives.
“Like it or not, we need to move forward with more adoption of cryptocurrencies worldwide. We need to adapt and make sure our investors have more options in crypto assets with the right protections,” she said.
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