The South Korean National Assembly on Thursday passed new legislation that would give the groundwork for the legalization and regulation of crypto exchanges and cryptocurrencies.
The representatives, in a unanimous decision, passed an amendment to the nation’s financial services laws. The revision would authorize financial regulators to oversee the promising internet-based industry. The comprehensive cryptocurrency law would also allow for the development of rules about processes, such as anti-money laundering.
The country’s largest city of Seoul led a government initiative to launch its cryptocurrency, dubbed the S-coin. The internet-based currency was designed to capture the hype of the crypto craze in South Korea.
Over the past few years, South Korea has been leading the cryptocurrency market boom and bust. A survey showed that at the height of the local crypto surplus, more than a third of the country’s workers actively invested in cryptocurrencies, such as Ethereum, Bitcoin, and other systems.
During that period, the Korean government moved quickly to create new regulations and oversee the spread of blockchain. The move triggered large movements in the price of Bitcoin due to investors observing the reaction of the country’s stockholders.
Thursday’s deliberation in the legislature is a relatively quick turnaround for regulators. In just a few years, the vote shows the increasing acceptance of cryptocurrencies used in financial services, and blockchain both domestic and abroad.
The passage of the comprehensive cryptocurrency law is a victory for the Korean startup ecosystem, but other significant questions remain about the sector.
Among the most controversial topics in the National Assembly is the issue over the legality of TADA, South Korea’s leading ride-hailing startup service. Since its launch in 2018, the company faced criticism and opposition from the traditional taxi industry.
Last February, the Seoul Central District Court ruled TADA to be a legal service. However, on Tuesday, The National Assembly passed the revision bill aimed at effectively banning TADA. If the plenary session passes the amendment to the Passenger Transport Business Act, TADA will need to stop its service.
The industry expects further action on TADA in the coming weeks.
Meanwhile, the passage of the cryptocurrency law would begin the creation of new regulations in the coming months. It will also provide time for existing and new startups and exchanges to shift into the law’s new regulatory apparatus.