South Korea to Lift Crypto Ban for Institutions—What’s Coming Next?

The South Korea government has finalized its decision to allow corporate institutions to participate in the cryptocurrency market.

The Financial Services Commission (FSC) confirmed the phased approach to institutional adoption, ensuring financial stability and investor protection.

This move aligns South Korea with global markets already embracing institutional crypto trading.

South Korea Plans Phased Corporate Access

The FSC presented a step-by-step plan for businesses to access digital asset markets.

Real-name accounts for selling purposes will become accessible through authorities starting in the first half of 2024.

This implementation framework will let institutions access crypto assets under controlled regulatory oversight.

– Advertisement –

Law enforcement agencies are scheduled to become the initial users of this system when they need to sell confiscated cryptocurrency assets.

The National Tax Service and the Korea Customs Service participate in this system.

The established procedures create an orderly system for handling various crypto-law enforcement matters.

University institutions and charitable organizations will acquire approval to exchange their crypto donations into standard currency during the second quarter of this period.

The government has set internal control guidelines, establishing efficient procedures for managing digital assets at these institutions.

The established standards introduce a systematic approach to working with crypto-based donations.

Crypto Exchanges to Access Cash Conversions

The authorities have approved crypto exchange transactions in which fees are transformed into monetary bank funds.

The reform allows businesses to transform their fees into money to support the payment of worker salaries and tax obligations.

To prevent situations of large-scale transaction conflict, the FSC will develop specific sales guidelines.

The literature supports that financial authorities will verify conversion procedures against current financial regulations.

The government plans to maintain open transparency throughout crypto market operations while supporting exchange platform activities.

The country needs this step to establish digital assets within its financial systems.

The strategic plan includes safeguards to prevent market instability from bulk sales events.

The FSC monitors how corporate liquidations affect the crypto market’s performance. The system will preserve price levels while protecting investor funds.

Institutional Investors to Join in the Second Half

South Korea will introduce a pilot program for institutional investors in the latter half of 2024.

Through this program, corporations that have been chosen can establish real-name trading accounts to make crypto investments.

The FSC has established partnerships with more than 3,500 authorized companies to implement this transition.

The authorities will prefer established businesses with experience working with high-risk financial products.

Capital Market Act-controlled firms have established themselves as competent risk managers because they operate under its governance mechanisms.

Such a selection strategy exists to control financial market fluctuations while promoting sensible cryptocurrency usage.

This initiative does not include financial institutions in its program.

Connecticut authorities concluded that the involvement of banking institutions with crypto sector might endanger the stability of the whole banking sector.

The authorities plan to keep observing this development before extending their approach.

New Regulations for Cross-Border Transactions

All corporate institutions handling international cryptocurrency transfers must adhere to strict FSC regulatory standards.

International trading activities will fall under the jurisdiction of the Foreign Exchange Transactions Act.

The enacted rules constitute a fundamental element for upholding market integrity.

Public authorities will create systems that enable international transaction monitoring and reporting abilities.

The national government has established measures to stop money laundering and other criminal financial operations.

The implemented strategies follow worldwide standards that govern oversight of digital assets.

Organizations that make crypto investments across borders must properly submit reports based on regulatory specifications.

The FSC implements standards through which institutional crypto trading becomes visible to all stakeholders.

The adopted rules shield investors and implement fair market compliance standards.

The South Korean government made a momentous policy change by letting financial institutions participate in crypto trading.

A gradual implementation strategy enables the regulated entrance of corporations into digital asset operations.

Homologous financial regulations exist to create an equilibrium between technological developments and financial market stability.