After imposing a blanket ban on domestic initial coin offerings (ICOs) in 2017, the Bank of Korea (BOK) is reconsidering its position.
The BOK has called for the issuance of ICOs, communicating an end to the prohibition. The Bank has stated that there is a need to institutionally allow local Crypto ICOs for traded digital assets like Bitcoin through the proposed Digital Assets Framework Act, according to South Korean news agency Infomax.
The proposed regulations are intended to provide greater clarity in the virtual asset sector. According to the report: When the Framework Act on Digital Assets is enacted in the future, it will be necessary to institutionally allow domestic Cryptographic asset ICOs. It is also expected that the effect will make it possible to prepare a protective device.
According to the BOK, the regulation’s goal is to protect consumers and improve the transparency of Crypto transactions. However, it was noted that regulations should not stifle innovation in the Blockchain sector. It continued:
A balanced approach is required to foster a healthy market by implementing a Crypto asset regulatory system that promotes Blockchain and Crypto asset innovation while not impeding the development of related industries through excessive regulation.
Following the crash of Terraform Labs, the BOK stated that regulations in accordance with Markets in Crypto assets (MiCA) are required, adding: In Korea, because users suffered greatly as a result of the Luna-Terra incident, MiCA-level regulations for Stablecoins were considered necessary to be adopted.
Following the crash of Terraform Labs, South Korea formed the Digital Assets Committee, which is tasked with developing regulations and supervising the digital asset sector until an appropriate government agency is established under the Digital Asset Framework Act.
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