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Financial Regulators in South Korea Are Cautious About Allowing Domestic Companies to Enter the Cryptocurrency Market



Financial Regulators in South Korea Are Cautious About Allowing Domestic Companies to Enter the Cryptocurrency Market

The Financial Services Commission (FSC) of South Korea has urged local companies against jumping headfirst into the cryptocurrency market, warning that they undertake due diligence before doing so. These remarks were made by Kim Joo-Hyun, the chairman of the FSC, during a symposium in Jung-gu, Seoul, on financial strategy.

When asked about the possibility of domestic enterprises entering the bitcoin market, Joo-Hyun insisted that further discussion was needed first. As a result of all the potential consequences, Joo Hyun’s apprehension worries are understandable. 

Hyun was reported to have said that the vast social conflicts and different public opinions necessitate the need for new trials and policies. Yet, there is a greater need for additional discussion on what posture Korea will pursue due to these issues. 

Also, in light of the more nuanced aspects of the distribution and issuance of virtual assets, he stated that they would look into the technological accouterments that need to be considered. 

Furthermore, Hyun added that discussions regarding this topic are occurring between the Office of Government Policy Coordination, the Ministry of SMEs and Startups.

On the other side, South Korea has demonstrated a significant interest in fostering innovation and advancing the building of web3 and the metaverse. The government is very interested in making the most of the new economic prospects of the latest technology.

South Korea’s Crypto Markets Have the Support of the FSC

Many young individuals in South Korea are intrigued by bitcoin and other cryptocurrencies due to the country’s reputation as a technological leader. Many significant electronics manufacturers are based there and keen on crypto.

In recent months, the Financial Services Commission has taken a more positive stance toward the cryptocurrency industry despite its previous advice for caution. The regulatory body has gone so far as to state that it will support the implementation of the technology in question if and when it becomes required and if doing so will shield investors from any potential harm.

Additionally, the FSC is contemplating whether or not it should reverse its decision to prohibit banks and other financial institutions from assisting cryptocurrency transactions. Yet, it does not intend to establish any new legislation and instead wants to use the existing laws.

The head of South Korea’s FSC suggested caution in allowing domestic companies to enter the crypto market.

Investors in Korea, On The Whole, Are High-Risk Takers

South Korean cryptocurrency investors, according to Korean media reports, have a significantly higher risk tolerance than their international contemporaries. Only about 26% of their portfolios are made up of Bitcoin and Ethereum, indicating that they invest their money in other tokens more susceptible to price fluctuations and overall risk.

In South Korea, 12.5% of the holdings in market capitalization are made up of XRP, the second most-held cryptocurrency in the country. Cardano, Solana, and Dogecoin are among other prominent tokens.