South Korea is set to lift restrictions on institutional crypto trading, signaling a major policy shift by the Financial Services Commission (FSC). This move aims to expand institutional participation in a market previously dominated by retail traders.
South Korea is about to loosen its strict rules on selling cryptocurrencies, which will be a big change to its policy.
The country’s Financial Services Commission (FSC) is planning to end its de facto ban on local banks taking part in crypto markets at the same time. This big change is likely to change how people trade in digital assets in South Korea.
South Korea’s Policy Changes Over Time
South Korea’s crypto space has been tightly controlled for years, and most institutional buyers have been kept out of the market. Individual retail buyers could trade crypto, but only after going through a strict verification process. It’s amazing how quickly crypto retail trade has grown in the country.
Institutional players were told by the FSC not to deal with crypto platforms. Even though this isn’t a complete ban, it has made it harder for bigger groups of people to participate in institutions.
The FSC now wants to change this approach. FSC is writing a detailed plan to gradually loosen these limits with the help of the Digital Asset Committee. The agency wants to start by working with non-profits and then finally give more institutions access.
People see this as a smart move to improve South Korea’s place in the global market for digital assets. It was different from years of careful control by the government. In line with his plan to bring the country’s cryptocurrency market back to life, President Yoon Suk-yeol made this change.
The People Power Party, which is currently in power and is led by Yoon, is still a strong supporter of using blockchain technology and digital currencies. The push for local crypto exchange-traded funds (ETFs) is still a key part of this goal.
South Korea still doesn’t have this program, even though many other countries and groups do. Digital product investments could make investors more confident and the market more open. South Korea is getting ready to become a competitive crypto hub by removing limits on trading in crypto by institutions.
This policy change makes it clear that crypto-focused innovation is welcome, with the goal of attracting big investors from both inside and outside the country.
Plans to make regulatory frameworks stronger
Along with the changes to policy, the FSC is also working on a follow-up to the 2024 Virtual Asset Investor Protection Act. This action by the government shows that it wants to protect the stability of the market.
The second part of this law is supposed to make rules that cover stablecoins, crypto platforms, and listing tokens that are more broadly. The goal is to make the crypto area more open and regulated so that institutional investors can feel safe and retail traders can do business.
The FSC also wants to change the Financial Information Act. These changes will mostly affect the big shareholders of virtual asset service companies. Putting in place a screening method for these shareholders will keep the crypto ecosystem free of shady players and protect the integrity of the money.
In the same way, many countries have changed how they feel about crypto, going from being skeptical or putting a lot of rules on it to having more open and friendly policies. A lot of people now see the potential in crypto and are changing their rules to help the field grow.
