South Korean Presidential Committee Says Financial Institutions Should Be Allowed to Provide Crypto Products

Financial institutions should be permitted to provide digital currency products like derivatives, as indicated by a government advisory body in South Korea. 

In a new report, the Presidential Committee on the Fourth Industrial Revolution (PCFIR) recommended the government could move to bring digital currencies in to the mainstream of finance through various measures, including derivatives.

With digital currency trading surging around the world, “it is no longer possible to stop crypto-asset trade,” stated the PCFIR, according to a report by Business Korea on January 6.

The committee stated the government could follow the lead of U.S. watchdogs and sanction products like futures contracts linked to bitcoin. Establishments would likewise be permitted to offer other digital currency services like 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 stated in the report.

To support such an initiative, the country’s fintech sector ought to create custody solutions for digital currency to stay away from dependence on foreign custodians, stated the PCFIR.

Addressing cryptocurrency exchanges, the committee stated the government should investigate getting a licensing scheme or guidance. The industry is right now loosely controlled by means of guidance given to banks, and a South Korean financial regulator under the Financial Services Commission is likewise purportedly intending to oversee exchanges legitimately.

Different recommendations from the PCFIR included, notably, that bitcoin may be legitimately listed on Korea Exchange, the country’s securities bourse, and that the terms “cryptocurrency” and “virtual currency” could be combined under the umbrella term crypto assets.

The PCFIR was established in 2017 to advise on strategies connected with new innovations and help lay the preparation for related new industries and services.