According to local news reports, South Korea’s central bank said it will allow initial coin offerings (ICOs) under the Digital Assets Framework Act. The comprehensive legislation is expected to be introduced in 2023 and implemented the following year.
The Bank of Korea (BOK) discussed ICOs in a Korean-language translation of the EU’s market in crypto assets (MiCA) legislation released Monday. BOK said the MiCA regulatory package protects users and investors without hindering innovation.
“It is necessary to promote blockchain and crypto-asset innovation by introducing a crypto-asset regulatory system, while not hindering the development of related industries, and fostering a sound market in a balanced manner. Excessive regulation,” the Bank of Korea wrote, and continued:
“When the “Digital When the Assets Framework Law is promulgated in the future, it is necessary to institutionally allow domestic ICOs of encrypted assets.”
South Korea Banned In 2017, domestic ICOs were at the peak of an ICO “mania” that led to global restrictions. The decision was controversial from the start. Since the ban was implemented, South Korean crypto companies have issued new crypto assets abroad and sold them in South Korea through domestic exchanges.
Related: South Korean financial regulator blocks dozens of unregistered exchange websites
BOK Also commenting on MiCA’s approach to stablecoin regulation, “Given the amount of pain users have suffered in the Luna-Terra incident, it is necessary to adopt MiCA-level regulation for stablecoins,” adding:
“When formulating the Digital Assets Framework Act, it is necessary to ensure that the roles and responsibilities of Korean banks, monetary authorities, stablecoins, etc. are clarified.”
Stablecoins have caught South Korea in recent months after members of parliament began investigating the collapse of Terra (LUNA) Attention Government – now renamed Terra Classic (LUNC). South Korean President Yoon Suk-yeol, a member of the conservative People’s Power Party, made deregulation of the cryptocurrency industry a campaign issue ahead of his election in March.