South Korea is taking strides towards developing a security token market with its top financial regulators giving top priority to protecting investors while also enabling innovation. In a joint report produced by the Financial Services Commission (FSC), the Financial Supervisory Service, Korea Exchange, and the Capital Market Research Institute, regulators have put forward a plan to eventually prepare guidelines for security token regulation by the end of 2022.
To ensure uniformity and sound compliance with existing laws, the FSC will soon be rolling out a Security Token Discipline System. This system will be custom-built to draw regulations from the existing Capital Market Act, Electronic Securities Act, and other applicable laws.
The agencies recognize the fact that the existing body of laws is insufficient to properly regulate the fast-changing dynamics of the digital securities market and are now taking steps to ensure there is a legal framework to support the growth of the industry.
South Korea just established guidelines to regulate the security token industry.
Many Koreans are going to be exposed to this exciting space in the coming days and weeks.
It's an honor to feature as the flag-bearer of tokenization on Korean TV. #INX https://t.co/0AuJOEeieK
— INX (@INX_Group) February 6, 2023
The Digital Asset Industry Finally Gets a Breath of Fresh Air!
South Korea’s position at the forefront of digital assets has weakened in recent years, as the nearby countries have seen a surge in utilization and acceptance. Following the election of President Yoon Suk-yeol, who is a believer in digital assets and distributed ledger technologies (DLT), the nation’s virtual currency ecosystem appears to be getting a boost.
The country’s Parliament is reportedly in the process of drafting a new bill, the Digital Asset Basic Act (DABA), which is said to be aimed at regulating the digital asset sector. This news, reported by the South Korean newspaper Kukmin, is seen as a positive step for those in the industry.
The nation has numerous initiatives regarding the advancement of the metaverse and is viewed as a prime mover in the global arena. Lawmakers are considering passing a Metaverse Industry Promotion Act that would grant incentives to businesses that shift their activities to virtual realms.