Financial Watchdog Denies Reports
South Korea’s Financial Services Commission has rejected news that it has agreed on a roadmap to allow corporate cryptocurrency accounts by the end of 2024. The financial regulator said discussions are still ongoing and no decisions have been made.
In a Dec. 4 statement, the FSC called for prudent reporting on the matter, “The corporate real-name account virtual asset provision will be further deliberated upon, and specific measures are not yet finalized.”
Rumored Phased Plan Raises Questions
Local reports by Korea Economic Daily claimed the FSC had prepared a plan for a gradual introduction of corporate cryptocurrency trading. The reported plan, which supposedly starts in 2025, first targets universities and local governments, then corporations and financial institutions.
However, the denial by the FSC puts a question mark on the veracity of these reports. It has maintained that the agency would not rush into changing regulations without a proper review.
Regulatory Hurdles for Corporate Crypto Participation Currently, corporations in South Korea face significant obstacles in accessing cryptocurrency markets. The country’s regulations mandate that crypto investors use real-name accounts at banks partnered with cryptocurrency exchanges.
It turns out there are only five exchanges in the country that have secured any banking relationships. Most financial institutions refuse corporations an opportunity to open real-name accounts under harsh AML compliance requirements, blocking corporate participation in South Korea’s crypto market effectively.
A Retail-Dominated Crypto Market
South Korea’s crypto market is driven predominantly by retail investors, with the Korean won emerging as one of the top fiat trading pairs globally. Daily trading volumes often exceed $35 billion, underscoring the market’s scale.
One such recent political event underlined the said activity. President Yoon Suk Yeol briefly declared martial law. Crypto trading volumes surged during these six hours of crisis till the decision was overturned by the National Assembly.
What’s Next?
Eventually, the FSC’s view on the corporate crypto accounts may give major blows to the market landscape. Permitting institutional and corporate participation might make South Korea’s reputation as a global crypto hub better. For now, though, the market still remains dependent on retail activity, as the regulatory environment evolves.
Removing these barriers, significant growth can be unleashed in an already quite robust cryptocurrency ecosystem of South Korea. Institutions are keenly watching as the FSC deliberates.
