On September 8, Kim Yong Tae, the head of the Financial Supervisory Service Fintech Innovation Department said at the Digital Asset Fair (DEXPO2020) “It is too early for virtual assets to be used as payment and settlement means.”

When asked if virtual assets could enter the financial sector, he said, “The rate of smartphone use in Korea is 97%. As virtual assets are easily accessible through mobile platforms. Koreans, in particular, have ability to quickly accept and learn through new products. They are less reluctant to invest in high-risk products, which may bring virtual asset speculation like the year 2018.”

He continued, “If you look at the Bitcoin white paper, Bitcoin was created for proof of concept. In other words, it is a concept like a model house. It is too volatile. It is yet too early to use it as a payment and settlement method.”

In light of this announcement, the government’s policy to support and foster blockchain technology but to take a cautious approach to virtual asset transactions has not changed. As Korea experienced crypto market of speculation in 2018, it is a policy to strictly respond to speculation and illegal activities, as well as to continuously regulate illegal money laundering and ICOs.

The regulation of technology is expected to remain neutral. The government is implementing a regulatory sandbox system to foster blockchain technology.

In the case of the regulatory sandbox, Casa Korea plans to launch a service that digitalizes real estate securitized beneficiary certificates using distributed ledger technology (DLT)., which will be issued and distributed to general public.

Koscom is implementing the management of the shareholders’ list of unlisted innovation and SME stocks to be transparently used and managed using blockchain technology. ICONLOOP plans to provide a distributed ID (DID) identification method using blockchain technology through a regulatory sandbox.

Kim said, “The financial industry should be regulated and trusted industry,” citing the example of the P2P market. He said, “The industry itself was shaken because of some of the peer-to-peer operators who gave false notices. Virtual asset providers can also mass-produce victims if they list risky coins with profitability or recommend leveraged products with high volatility. Then, like the peer-to-peer market, the entire industry can lose trust.”

He also mentioned, “When the Specific Financial Transaction Information Reporting and Use law will be implemented in March 2020, funds flowing into the virtual asset investment will be transparent which will ultimately be possible to protect investors.”

번역: 김동우 기자