The Financial Services Commission of South Korea is to create a new department dedicated to cryptocurrency and blockchain technology. This is seen as an effort to create smarter regulation after knee-jerk regulating in the past.
The new department, currently dubbed the Financial Innovation Bureau (FIB), will apparently assist in the development of policy initiatives for the blockchain and fintech industry within the country as part of the coming Fourth Industrial Revolution.
“The new Financial Innovation Bureau will … be tasked with policy initiatives for financial innovation, such as innovating financial services using fintech or big data, and responses to new developments and challenges such as cryptocurrencies.” said an FSC official on the subject.
It is speculated that the creation of the department has come from a recognition that South Korea was perhaps too hasty to regulate in the past. In 2017, the country outlawed Initial Coin Offerings (ICOs), only to repeal the ban in May on the condition that certain protections were provided to investors.
This will not be a permanent appointment however: the Financial Innovation Bureau will only be operational for two years, already to be dissolved in 2020. Korean regulators appear to have sided with the findings given by the Financial Stability Board last week, which stated that cryptocurrency did not pose a risk to existing financial infrastructure. Now South Korea may be hoping to make up for lost the time of its delayed start into the crypto world by working with industry to create policy initiatives which foster development in the country without stunting industry growth.
South Korea, which represented a significant portion of global crypto trade in 2017, has not had the best history with blockchain. There have been exchange hacks as well as fraud cases in the past. Despite this, an official from the FANTOM Foundation, a blockchain tech firm based in Korea welcomed the news that Korea may be relaxing on restrictive blockchain rules:
“I think Korea can be an ideal incubator to test drive new virtual coins and their blockchain systems. High-speed internet infrastructure is already here, unparalleled to any other country in the world. And the Korean people are very adoptive of technology. Now it is the government’s role to establish a favorable environment for virtual coins and their blockchains.”
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