South Korea has observed a rise in demands for Web3 services
The country aims to be competitive in the emerging VDA sector
South Korean authorities are working on finalising crypto rules
South Korea to allow charities and schools to sell crypto donations
Photo Credit: Pixabay/ Big_Heart
South Korea is collaborating with various internal authorities to develop its Web3 market. In a recent move, the Financial Services Commission (FSC) unveiled a roadmap to gradually integrate local corporations into the VDA market, which primarily consists of cryptocurrencies. Looking ahead, South Korea aims to assess the financial aspects of cryptocurrencies and foster sector growth under legal oversight.
In 2025, the country will pilot two trials: crypto-related sales transactions and VDA trading for investment and financial purposes, the FSC stated in its statement.
Details Outlined by the FSC
South Korea recently implemented the ‘Virtual Asset User Protection Act' to strengthen investor safeguards. After deliberation, the Virtual Asset Committee concluded that corporations should have the opportunity to explore the VDA market under FSC oversight.
Elaborating on the factors that resulted in this decision, the FCA noted, “major countries overseas are broadly allowing corporations to participate in the market and the market environment is changing as domestic companies are also seeing an increase in demand for new blockchain-related businesses. Accordingly, the demand to allow corporations to trade virtual assets has been continuously increasing in Korea.”
FSC's document claims that approximately 3,500 listed companies and corporations have registered themselves as professional investors under the Capital Market Act. As part of the roadmap, the country will start allowing select institutional investors to open real name trading accounts for VDA engagements. Eligible corporations will need to show a balance of between KRW 5 million (roughly Rs. 3 lakh) to KRW 10 million (roughly Rs. 6 lakh) in financial investment products, to qualify for the pilot programme.
“Professional investors under the Capital Market Act can already invest in derivative products with the greatest risk and volatility. These corporations have a high demand for blockchain-related businesses and investments,” the FSC said in its announcement post.
South Korea also plans to allow organisations like educational institutions and charities to sell donations they have received in crypto for financial gains in the market. Law enforcement agencies, designated donation organisations, universities, crypto exchanges, and school corporations have been listed by the FCA as eligible participants in these trials.
The agency further noted that the Virtual Asset Committee worked with 12 sub-committees and traditional finance institutions to propose this roadmap for corporations to engage with VDAs.
FSC to Form Task Force
In the coming months, the FSC said it will establish a crypto-focussed task force with members like the Korea Federation of Banks, and the self-regulatory Digital Asset Exchange Joint Consultative Group (DAXA) to finalise the “Internal Control Standards” and “Selling/Trading Guidelines” to implement its prepared roadmap to onboard corporations onto the Web3 wagon.
The FSC has yet to announce a timeline for establishing the task force.
“In addition, it plans to further strengthen communication with the market, including virtual asset business operators and industry experts, to support smooth corporate market participation according to the roadmap,” the agency noted.
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