FSC to establish department exclusively for virtual coins

Financial Services Commission Chairman Choi Jong-ku

By Jhoo Dong-chan

The financial regulator will establish a department exclusively for policymaking initiatives in the nation's blockchain industry, the Financial Services Commission (FSC) said.

As a part of its restructure plan to lead financial innovation in the coming Fourth Industrial Revolution era, the FSC has decided to establish the so-called Financial Innovation Bureau. The decision was made during the top financial regulator's cabinet meeting with the Ministry of the Interior and Safety.

Although the Financial Innovation Bureau is a temporary body with a two-year lifespan, the FSC said it will help nurture Korea's fintech industry, mostly covering the nation's cryptocurrencies and blockchain technology.

The agency's efforts are believed to side with the Financial Stability Board's (FSB) recent report that claimed crypto assets "do not pose material risk to global financial stability."

The FSB is an international body that monitors and makes recommendations about the global financial system to the G20 and central bank governors.

The FSB's announcement echoes a similar statement by the Bank of Korea (BOK) last week. Addressing the peak trade balance of about 2 trillion won ($1.79 billion) when crypto fever struck the country last December, the BOK concluded that "the amount represents a limited risk to other markets and financial institutions due its relatively small size."

Thanks to favorable decisions by regulatory bodies at home and abroad, the price of bitcoin, the most widely used virtual coin, reached over 8 million won at major crypto exchanges. According to the nation's largest exchange, Bithumb, bitcoin's price was 8.18 million won as of 2:30 p.m. Thursday.

"The FSC plans a major organizational reshuffle to better protect financial consumers and proactively respond to financial innovation in the Fourth Industrial Revolution era," an FSC official said.

"The new Financial Innovation Bureau will also be tasked with policy initiatives for financial innovation, such as innovating financial services using fintech or big data, and responses to new developments and challenges such as cryptocurrencies."

Industry observers welcome the FSC's decision.

"Virtual coin and related blockchain technologies will come to our everyday life sooner or later," an official from blockchain tech firm FANTOM Foundation said.

"I think Korea can be an ideal incubator to test drive new virtual coins and their blockchain systems. High-speed internet infrastructure is already here, unparalleled to any other country in the world. And the Korean people are very adoptive of technology. Now it is the government's role to establish a favorable environment for virtual coins and their blockchains."

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