South Korea is planning to ease restrictions on institutional investments in cryptocurrencies, signaling a more accommodating stance on digital assets.
The Financial Services Commission (FSC) will review existing regulations to strengthen collaboration between traditional financial institutions and fintech companies. The FSC's announcement indicates that legal entities will be allowed to invest in cryptocurrencies starting this year, a change from previous guidelines that limited institutional trading.
The FSC will implement the easing of restrictions gradually, with a focus on allowing non-profit corporations to engage in crypto investments initially. The FSC also plans to promote regulations concerning the distribution of digital assets to enhance investor protection and market integrity.
To improve self-regulation and market integrity, the FSC will introduce a screening system for major shareholders of virtual asset operators and implement criteria for reviewing various cryptocurrencies. The regulatory body is committed to maintaining a fair and transparent market environment.
The evolving regulatory landscape reflects a growing recognition of the importance of integrating virtual assets into institutional finance. The Korea Exchange is exploring the introduction of crypto exchange-traded funds (ETFs) by 2025 to further legitimize digital assets within the traditional financial framework.
South Korea has postponed the implementation of its crypto taxation policy by two years, providing breathing room for investors and market participants. The delay is expected to allow them to navigate the evolving regulatory landscape without immediate taxation pressure.
As South Korea adapts its regulatory framework, increased institutional participation and the development of innovative financial products could significantly impact the country's position in the global crypto market.