Ripple Provides Policy Framework for Digital Asset Regulation in South Korea
Ripple is recommending Korea’s policymakers and regulators to further develop the country’s blockchain ecosystem by implementing a “smart” regulatory framework and encouraging the participation of financial institutions.
In a policy paper, titled “A Policy Framework for Blockchain and Digital Assets in Korea”, launched in partnership with GBC Korea and Oxford Metrica, the global payments and blockchain solutions provider recommended providing a clear distinction between payment tokens, utility tokens and security tokens, as well as the developing controlled sandboxes with regulatory oversight for market participants to test new products and business models with end-users.
“We believe the policy recommendations outlined in this paper strike the right balance between providing regulatory clarity, while having a regulatory framework that’s forward-looking and flexible. We are optimistic that Korean policymakers and regulators will implement a smart regulatory framework to foster innovation, while ensuring that sufficient safeguards are in place for the blockchain and digital assets ecosystem to flourish in Korea”, said Ripple APAC policy director Rahul Advani.
The survey conducted by Oxford Metrica revealed that Korea’s leading financial institutions are all actively pursuing the idea of adopting blockchain technology as a part of their mainstream operations, with 40% having already developed a proof of concept and 60% in the pilot stage of implementation.
In terms of lines of business being pursued, 80% were focused on payments, while 20% were focused on capital markets. 90% of participants also indicated that CBDCs (central bank digital currencies) are the “preferred type of digital asset”, followed by non-bank stablecoins at 10%.
The full report can be read here.
Last week, pro-crypto candidate Yoon Suk-yeol claimed victory in South Korea’s presidential election.
While Yoon’s predecessor oversaw the closure of approximately 70 crypto exchanges, the incoming president has taken a far more liberal approach to cryptocurrencies.
Yoon has reportedly pledged to raise the threshold for paying capital gains tax on earnings from Bitcoin and other cryptocurrencies from US$2,000 to US$ 40,000. He has also indicated that he will review a 2017 ban on initial coin offerings (ICOs).
Last year, in the lead-up to the election, Yoon minted an NFT of his signature on the ICON blockchain and also launched his own NFT collection.
“To realise the unlimited potential of the virtual asset market, we must overhaul regulations that are far from reality and unreasonable”, Yoon said on the campaign trail in January.
“We must shift to a negative regulation system to ensure at least the virtual asset market has no worries”.
Yoon’s pro-crypto stance is likely to embolden Korea’s crypto industry and foster a more innovative environment for blockchain companies and financial institutions. A clear regulatory framework such as the one recommended by Ripple will only contribute to a more robust blockchain ecosystem in the country.