South Korea Is Gearing Up to Institutionalize Security Tokens
South Korea Security Tokens
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South Korea IsGearing Up to Institutionalize Security Tokens
Financialregulators in South Korea want to bring security tokens, which are blockchain-baseddigital forms of traditional securities, into the scope of the country'scapital markets rules in an effort to formalize the products.
Thecountry's top financial regulators, including the Financial Services Commission(FSC) and Financial Supervisory Service, met with industry representatives likethe Korea stock market (KRX) at a seminar on Tuesday to gather feedback on howto approach new rules.
Based on theopinions gathered at the policy seminar, the FSC plans to publish guidelinesfor the issuance and commercialization of security tokens by the end of 2022.Afterwards, it plans to modify the country's existing electronic securities andcapital market regulatory frameworks to cover security tokens.
South Koreais speeding ahead with new plans to regulate the digital asset sector followingafter a turbulent market earlier this year slashed crypto prices and broughtdown some industry heavyweights. The FSC has vowed to accelerate new rules forthe crypto sector, while anti-money-laundering authorities are scrutinizingcrypto platforms operating in the country.
TheKorea Institute of Finance, which provides in-depth analysis of the country'sfinancial sector, has warned the crypto industry poses a major threat to SouthKorea's financial stability.
The currentcapital market and electronic securities systems in South Korea do not supportblockchain technology, a summary of Tuesday's seminar said, adding thatincorporating the issuance and distribution of security tokens into theseframeworks is necessary to protect investors and financial stability.Theregulators also plan to set up a pilot through a regulatory sandbox to informthe formal institutionalization of security tokens.
South Korea’s financial regulators are reportedly gearing up to implement a framework that will allow security tokens, which are blockchain-based forms of traditional securities, into the scope of the country's financial markets rules.