South Korea’s financial regulator has suggested caution when it comes to allowing domestic firms to enter the crypto market.
South Korea’s Financial Services Commission (FSC) has asked to be cautious about entering the crypto market when it comes to domestic companies. FSC Chairman Kim Joo-Hyun made the comments at a financial strategy forum held in Jung-gu, Seoul.
Joo-Hyun insisted that more talks were needed to allow domestic companies to enter the crypto market. We understand why Joo-Hyun would be a bit cautious, given that there are risks involved. He was quoted as saying,
“It is true that new lawsuits and policies are needed, but since social conflicts are high and opinions are divided, it is necessary to continue the discussion on the position Korea will take…technical supplements will be discussed in taking into account the specificities of the issuance and distribution of virtual assets.It is under discussion within the Office of Coordination of Government Policies with the Ministry of SMEs and Startups.
However, South Korea has also focused on fostering innovation and encouraging the development of web3 and the metaverse. The country wants to harness the potential of technology to boost its economy.
FSC shows support for South Korean crypto markets
Despite the plea for caution, the FSC has become more sympathetic to the crypto market in recent months. The authority even said that it would encourage the use of the technology if necessary and if it would protect investors from harm.
The FSC is also considering reversing its ban on prohibiting banks and financial institutions from facilitating crypto transactions. As it stands, it is not looking to adopt new regulations and will instead use existing laws.
South Korea is a tech-savvy country, with much of the young population interested in cryptocurrency. It is home to some of the largest electronics companies in the world, which have also shown interest in the crypto industry.
Korean investors have a relatively high appetite for risk
Korean media reports that South Korean crypto investors have a much higher appetite for risk than their global counterparts. Bitcoin and ether only make up around 26% of their portfolios, which means they spend their capital on other tokens, which are more prone to volatility and risk.
XRP is the second most popular cryptocurrency in South Korea, accounting for 12.5% of holdings. Other tokens that have a notable presence are Cardano, Solana, and Dogecoin.
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