In the wake of further recent gains in the cryptocurrency sector which saw Bitcoin prices rising by more than ten percent, the South Korean financial regulatory agency has announced a “proactive response” to “financial innovation.” The Financial Services Commission (FSC) has formed a Financial Innovation Bureau to take care of cryptocurrency-related issues.
The regulator says that the new bureau will act to protect consumer interests and that it will be proactive in responding to financial innovation.
Recent Events Drive Policy Changes
Korea’s membership in the international Financial Stability Board may have contributed to the decision, as the organization recently announced its finding that cryptocurrencies will not place the global financial system at risk. The Board advocated a lenient policy approach to cryptocurrency-related questions.
The Korean Supreme Court has ruled that bitcoin should be give recognition as a legal asset following appeals after lower courts had ruled that this was not the case. The country, which has previously traded bitcoin at a price 50 percent higher than international averages, now seems to be ready to embrace cryptocurrencies as part of its financial landscape.
But greater official oversight and support has not only been spurred by positive developments. In June, a large South Korean cryptocurrency exchange was subjected to hacking, harming confidence and driving bitcoin prices downwards.
The FSC introduced stringent anti-money-laundering regulations last week, requiring banks to disclose certain information and to exercise vigilance, freezing any cryptocurrency transactions that appear to be suspicious.
Government in Tune with South Korea’s Enthusiasm for Cryptocurrencies
Local cryptocurrency experts say that Korea appears to be creating an environment which will be conducive to the testing of new cryptocurrency projects and their related blockchains. Already, the country is becoming a trading hub for bitcoin and other cryptocurrencies and has one of the largest virtual coin exchanges.
Recent government policy moves are generally thought to be positive and conducive to a strong and secure environment for cryptocurrency traders and their clients.