South Korean Presidential Committee Wants to Bring Crypto Into Mainstream Finance

Financial institutions should be allowed to launch cryptocurrency products, such as derivatives, according to a government advisory body.

AccessTimeIconJan 6, 2020 at 1:37 p.m. UTC
Updated Sep 13, 2021 at 12:06 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

Financial institutions should be allowed to offer cryptocurrency products such as derivatives, according to a government advisory body in South Korea.

In a new report, the Presidential Committee on the Fourth Industrial Revolution (PCFIR) proposed the government could move to bring cryptocurrencies into the mainstream of finance through a number of measures, including derivatives.

With cryptocurrency trading surging worldwide, "it is no longer possible to stop crypto-asset trade," said the PCFIR, as per a report by Business Korea on Monday.

The committee said the government could follow the lead of U.S. regulators and sanction products such as futures contracts tied to bitcoin. Institutions would also be allowed to offer other cryptocurrency services such as trading.

"The Korean government has to gradually allow institutional investors to deal in crypto assets and promote over-the-counter (OTC) desks dedicated to institutional investors’ trade," the committee said in the report.

To support such a move, the nation's fintech sector should develop custody solutions for cryptocurrency to avoid a reliance on foreign custodians, said the PCFIR.

Addressing crypto exchanges, the committee said the government should look into bringing in a licensing scheme or guidance. The industry is currently loosely controlled via guidance given to banks and a South Korean financial watchdog under the Financial Services Commission is also reportedly aiming to directly supervise exchanges.

Other suggestions from the PCFIR included, notably, that bitcoin might be directly listed on Korea Exchange, the nation's securities bourse, and that the terms "cryptocurrency" and "virtual currency" could be brought together under the umbrella term crypto assets.

The PCFIR was set up in 2017 to advise on policies relating to new technologies and help lay the groundwork for related new industries and services.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.