South Korea Accelerates Crypto Regulations in Response to U.S. GENIUS Act
South Korea’s ruling Democratic Party is expediting the implementation of new Bitcoin and cryptocurrency regulations following the enactment of the GENIUS Act in the United States. As digital asset ownership surges in the country, with over a quarter of individuals aged 20 to 50 holding cryptocurrencies, policymakers are moving swiftly to establish clearer guidelines on investor protection and taxation.
Fast-Tracking Regulations in Response to U.S. GENIUS Act
The decision to fast-track crypto regulations in South Korea stems from the necessity to align with major economies and construct a robust regulatory framework for digital assets. The ruling party aims to swiftly update existing laws to encompass Bitcoin, stablecoins, and cryptocurrency exchanges. This initiative involves delineating responsibilities for platforms and enhancing protocols to combat fraudulent activities in the crypto sphere.
Development of a Won-Backed Stablecoin
As part of the regulatory revamp, Korea Investment and Securities is in the process of creating a stablecoin pegged to the Korean won. This endeavor is geared towards facilitating local payments and transfers, offering a convenient and secure means of conducting daily transactions. The stablecoin will be fully backed by reserves denominated in the Korean won.
Scope of the New Regulations
The forthcoming Bitcoin laws will encompass specific provisions related to taxation, investor protection, and the oversight of exchanges and stablecoins. The Financial Services Commission is poised to play a pivotal role in overseeing the enforcement of these regulations, which will dictate how platforms handle customer assets and comply with reporting obligations. Furthermore, the regulations may classify digital assets into distinct categories such as payment tokens or asset-backed tokens.
Global Influences on South Korea’s Regulatory Approach
South Korea’s regulatory stance is influenced by international frameworks like the European Union’s Markets in Crypto-Assets (MiCA) policy and the GENIUS Act in the United States. While not directly mirroring U.S. legislation, South Korean lawmakers are poised to integrate key standards from global regulatory structures, emphasizing operational transparency and safeguarding the interests of both retail and institutional users.
Impact of Rising Crypto Ownership in South Korea
The surge in digital asset ownership in South Korea, particularly among individuals across various age groups and income brackets, highlights the imperative for enhanced regulatory safeguards. With a significant portion of the population looking to diversify their crypto holdings, the need to establish comprehensive legal protections in the evolving digital asset landscape has become more pronounced.
According to Sam Boolman, ChainIntel’s lead analyst: ‘South Korea’s proactive approach to regulating cryptocurrencies post-GENIUS Act demonstrates a commitment to fostering a transparent and secure crypto ecosystem. By aligning with global regulatory standards, South Korea aims to bolster investor confidence and ensure sustainable growth in the digital asset market.’
Source: Coinedition
