• The South Korean financial services commission (FSC) recently published rules outlining which digital assets will be regulated as securities in the country.
• Assets like stablecoins that fall outside the category of securities will operate following the upcoming digital assets regulations.
• The FSC also stated that cryptocurrency and other digital assets‘ security-like financial assets will be assessed on a case-by-case basis.
South Korea Gives Security Token Guidelines
The Financial Services Commission (FSC) of South Korea has released guidelines for how blockchain-based tokens are to be regulated as securities in the country. According to these guidelines, all tokens with characteristics that fit into the country’s capital market act will be treated and regulated as securities.
Assets Outside Securities Category
In contrast, assets like stablecoins which fall outside this category will adhere to the upcoming digital asset regulations. The FSC also stated that cryptocurrency and other digital asset security-like financial assets must go through a case-by-case assessment before they can be approved or rejected.
Aim of Guidelines
These new guidelines aim to both support innovation while simultaneously ensuring consumer protection by having issuers and brokers such as crypto exchanges evaluate each asset in accordance with these rules. The first half of 2023 is expected to see promotions and institutionalization through submitting these drafted guidelines for assessment.
South Korea’s Crypto Engagement
South Korea has been actively involved in engagement within the crypto ecosystem, some examples being its plans to develop a blockchain virtual power plant, discussions during national assembly policy regarding ICOs, and announcement of building the world’s first decentralized digital commodity market by H2 2023 with all products tokenized and traded on blockchain technology, among others.
In conclusion, South Korea’s friendly disposition towards cryptocurrencies is evident from their various initiatives aimed at stimulating growth in this space while still maintaining regulatory control over it.