According to a South Korean news source, the local central bank has suggested that Initial Coin Offerings (ICOs) would be permitted under the Digital Assets Framework Act. It is predicted that the comprehensive legislation would be unveiled in 2023 and put into effect the following year.
The Markets in Crypto-Assets (MiCA) legislation of the European Union was interpreted in the Korean language on Monday, and in comment thereof, The Bank of Korea (BOK) discussed ICOs. The MiCA regulatory framework, according to the BOK, safeguarded users and investors without hampering innovation.
The Korean central bank noted that — in an effort to promote blockchain and crypto asset innovation without any industry-related development hindrance due to excessive regulation — a balanced approach is necessary to establish a sound market through the introduction of a crypto asset regulatory system.
The bank added that it is vital to institutionally allow domestic crypto-asset ICOs when the Digital Assets Framework Act is established in the future.
In 2017, during the peak of the ICO incident that has resulted in global restrictions, South Korea decided to ban domestic ICOs. From the beginning, the decision was controversial. Since then, South Korean crypto firms had launched new digital assets both domestically and abroad.
The BOK also commented on the MiCA approach to stablecoin regulation, saying that it is vital to adopt MiCA-level regulations for stablecoins given how much the Luna-Terra collapse cost users.
The monetary authority added that it is important to clearly define its role and responsibilities for stablecoins (and more) when the Framework Act on Digital Assets is enacted.
Since the collapse of Terra (LUNA) — now known as Terra Classic (LUNC) — the members of the parliament have been looking into the incident. This ends up drawing the attention of the South Korean government to stablecoins in the recent months.
Prior to being elected in March, the conservative People Power Party member and South Korean president Yoon Suk-yeol, made deregulation of the crypto industry a campaign issue.
