The South Korean government has adopted a two-track approach in regulating the blockchain industry. It has become proactive in fostering blockchain in non-financial sectors but negative in the use of blockchain in financial services.
The Ministry of Science and ICT has commissioned a task force to streamline regulations on the blockchain industry.
The ministry said the task force would check whether the existing regulations hinder the development of the blockchain industry,
The task force started its work on the assumption that broader use of blockchain will upgrade the domestic industries, cutting data storage cost and quickening transaction speed
The task force will identify the existing rules that hinder the use of blockchain in industries. A Ministry official acknowledged that many outdated rules exist, which blocks development of the blockchain infrastructure. The government will take proactive and preemptive steps to foster the blockchain ecology.
However, the financial regulators, including the Financial Services Commission, are taking a wait-and-see attitude over the use of blockchain in financial services. Its passive position is convincing because cryptocurrencies are quite speculative. It has yet to introduce a mechanism to prevent the use of blockchain in money laundering, capital flight, and speculative cyber currency trading,
But many experts say Korea may have limits in fostering the blockchain industry if it separates virtual currency from blockchain. They noted blockchain and cryptocurrency are two inseparable wheels of a cart.
