South Korea is showing that it isn’t overly difficult to create the necessary framework for the cryptocurrency industry. According to the Korea Joongang Daily, government officials are closer to legitimizing Bitcoin, thanks to the passage of a bill that creates the foundation for virtual assets in the country.
The South Korean National Assembly, through its national policy committee, has approved legislation that would classify digital currencies as digital assets, paving the way for them to receive legal status in the country. The move is seen as a positive step forward and the Financial Services Commission (FSC) agrees that the designation will allow for more transparency and investments in crypto.
As legitimate assets, businesses dealing with crypto will be obligated to adopt the same anti-money-laundering regulations that exist for other types of currencies. Bitcoin would also be governed by the same rules that are currently in place for other financial transactions, allowing the digital currency space to move forward on a much larger, regulated scale.
The legislation asserts that all crypto-related businesses will have to register with, and report to, the Financial Intelligence Unit of the FSC. Any entity that doesn’t follow these requirements, or that doesn’t acquire an Information Security Management Systems permit or that allows falsification of identification related to accounts, will not receive approval to operate. That alone will have its own consequences.
However, there will also be consequences if any entity doesn’t create internal oversight policies and procedures that are consistent with standards established by the Financial Action Task Force. The FATF is taking a strict stance on crypto transactions, just like it has already done with other types of financial transactions, and will hold the industry to higher standards than what have previously been allowed.
The new bill in South Korea isn’t quite ready to be implemented, although it’s getting there. The next step is for it to be approved by the state judiciary committee and, if that happens, the National Assembly as a whole. If it makes it through all the steps, it would officially become law one year later.
South Korea is one of a handful of countries that were quick to realize the importance, and the reality, of digital assets. It has been leading the way toward more global acceptance while other countries, such as the U.S., have been almost completely opposed to seeing crypto become the norm. Those countries who have fallen behind are now going to have to catch up with the rest after coming to the realization that crypto is here to stay and will inarguably be a major part of a global financial system.
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