A report published recently in South Korea revealed that the country’s central bank, The Bank of Korea, would finally be given the go-ahead to investigate operators of virtual assets and other crypto firms in the country.
It is a landmark development since the central bank did not agree over matters of crypto firms with South Korea’s financial regulatory authority, the Financial Services Commission (FSC).
The issue of crypto regulations has been under discussion in the National Assembly, where the Financial Services Commission submitted its acceptance for the Bank of Korea to probe local crypto firms. Regarding the progress of the Virtual Asset Act, an official of the National Assembly’s Political Affairs Committee specified that the central bank’s authority to request data submission is being explored in the act.
The National Assembly was currently accepting opinions regarding the bill from the government, while the Financial Services Commission would likely express its official position on the matter at the bill’s first subcommittee on April 25. It could lead to faster passing and implementation of the Virtual Asset Act.
The Bank of Korea has specified that it holds the authority to request the submission of data on crypto firms and virtual asset issuers, specifically for stablecoins. Since the risks of digital assets could spread to the financial system, the central bank implied that it was only logical for the Bank of Korea to be able to regulate it.
On the other hand, the Financial Services Commission doesn’t want crypto to be considered on par with traditional finance. The central bank governing crypto firms could send the message that digital assets were financial assets.
The FSC has stated, “If the Virtual Asset Act specifies the inspection right of the Financial Supervisory Service, it will cause the general public to misunderstand that the virtual asset market/business operator is treated the same as the financial market/institution.”
For now, both the Financial Services Commission and the Bank of Korea would be able to have regulatory authority over crypto firms in South Korea.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash