The FSC intends to develop a regulatory framework for stablecoins and expedite the next phase of virtual asset legislation, which includes regulating the issuance and listing of virtual assets.
South Korea is fast-tracking its legislation on virtual assets and stablecoins, signaling a major shift in its financial strategy. Kim Byoung-hwan, Chairman of the Financial Services Commission (FSC), revealed plans to accelerate cryptocurrency institutionalization, demonstrating a stronger commitment to investor protection while staying in line with global trends.
In a January 22 press conference, Kim Byoung-hwan stressed the importance of balancing industry growth with investor protection. He acknowledged the growing concern about this balance and noted a current emphasis on protecting investors.
“There has been concern about finding a balance between fostering (the virtual asset industry) and protecting investors. Currently, we are a little more interested in protecting investors,” the translated Kim Byoung-hwan’s statement reads.
He also acknowledged the potential influence of the second Trump administration’s proactive stance on cryptocurrencies, which could encourage similar movements globally.
The FSC intends to develop a regulatory framework for stablecoins and expedite the next phase of virtual asset legislation, which includes regulating the issuance and listing of virtual assets. Kim emphasized the need to address gaps from the first stage of legislation, particularly concerning stablecoins, and mentioned that they “will speed up this area a bit more than previously thought”.
Korea Grants Real-Name Accounts for Corporations
Korea’s institutionalization efforts include granting real-name accounts for corporate entities to facilitate virtual asset transactions. Currently, corporations in Korea face restrictions that prevent them from investing in cryptocurrencies through linked accounts. Addressing this, Kim stated:
“Last week, the Virtual Asset Committee held a meeting and a press release was issued, but the corporate account information was missing. So, some are saying that they are not doing it, but that is not the case.”
Kim assured the public that discussions on corporate accounts remain ongoing, with decisions to be announced soon. He emphasized that South Korea cannot disregard global trends and affirmed preparations to accelerate institutionalization.
The Financial Services Commission has adopted a dual approach: aligning with international trends while prioritizing domestic protections. Observers suggest that South Korea’s strategy may become a model for other nations managing the rapid development of digital currencies.
FIU Review of Upbit Suspension Notice
A key issue in cryptocurrency discussions involves the Financial Intelligence Unit’s (FIU) sanctions review of Upbit, South Korea’s largest virtual asset exchange. During a routine inspection, the FIU flagged Upbit for failing to adhere to the Know Your Customer (KYC) system and for engaging in transactions with unregistered virtual asset businesses. Recently, Upbit also got a suspension notice from FIU.
Kim commented on the ongoing review, explaining that “there will be rigorous discussions and the results will come out, so I cannot comment on the level of sanctions”. However, he stressed the urgency of resolving the issue swiftly to minimize user concerns. “I think it’s important to reach a conclusion as quickly as possible, as users may be affected or feel uneasy,” he added.
The potential sanctions have attracted significant attention, as they may establish a precedent for regulatory enforcement in South Korea’s rapidly growing cryptocurrency market. Given Upbit’s dominant position, the outcome holds considerable significance for both investors and regulators.
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