Bank of Korea to oversee crypto regulation

Amid ongoing debates on proposed laws about virtual assets in South Korea, the country’s central bank has been granted the go-ahead to increase its attention to cryptocurrency service providers and issuers.

Local news source The Korea Herald published an article on April 20 stating that the Bank of Korea (BoK) would be granted the authority to conduct investigations against operators of companies associated with cryptocurrencies.

The Bank of Korea has voiced concern over the threats to financial stability posed by stablecoins, and it will now have the right to seek transaction data from crypto exchanges.

A representative from the National Assembly’s Political Affairs Committee provided confirmation last week that the BoK is within its legal rights to collect data from operators of digital currency exchanges. At a subcommittee meeting on April 25, the FSC will provide an official statement about its stance.

This new development will make the cryptocurrency transaction data on exchanges inside South Korea accessible to the South Korean central bank.

The article also indicates that the conference would hasten the implementation of South Korea’s legislation governing virtual assets.

The government of South Korea has been attempting to advance crypto legislation. Still, there have been disagreements between the country’s central bank and the Financial Services Commission (FSC) on who should oversee it.

Korea’s moves face opposition

However, the Financial Stability Commission (FSC) warned that if the central bank were to oversee cryptocurrencies, it would give the idea that digital assets have the same status as conventional money. The head of the Financial Stability Oversight Council has said that he does not believe cryptocurrency to be a financial asset.

The FSC, South Korea’s financial regulator, has been in a tug-of-war with the South Korean central bank over the jurisdiction of cryptocurrencies. Nevertheless, the FSC will have the last say in determining how the digital asset industry is governed and regulated.

Since the cryptocurrency regulatory debate began three years ago, the two organizations have been at loggerheads. The Financial Services Commission (FSC) has been accused of attempting to monopolize its position as a cryptocurrency regulator by officials from a section of the country’s State Affairs Commission called the Political Affairs Committee.

The Financial Services Commission of Australia has lately been aggressive in taking enforcement measures against crypto firms. The FSC agrees with the United States Securities and Exchange Commission’s stance that crypto assets should be regarded as securities, and the FSC has been active in taking these steps.

Midway through 2022, the Financial Supervisory Service of South Korea, a subsidiary of the FSC, announced that it would establish an investigating body known as the Digital Assets Committee.