South Korean Financial Services Commission Approves Central Bank’s Request for Data Submission Right

On April 22nd, it was reported that the South Korean Financial Services Commission (FSC) has abandoned its opposition to the Central Bank’s acquisition of the “request for data submission right”, and the Central Bank of Korea will be granted the right to investigate virtual assets. According to local reports, the FSC’s decision was made a few weeks after a subcommittee of the Political Affairs Committee of the South Korean Parliament accused the regulatory agency of seeking to become the sole regulator of virtual assets. It is reported that as the FSC has decided to waive its requirements, there are reports that the South Korean National Assembly will continue to develop plans to incorporate the right of the Central Bank of Korea to request data into the Virtual Asset Law. Before finally agreeing to the central bank’s request, there were multiple conflicts between the FSC and the Central Bank of Korea regarding which of the two institutions should regulate payment settlement. On the other hand, the central bank insists on being granted the right to investigate digital assets, as the risks generated by the virtual asset market ultimately threaten financial stability. （News.Bitcoin）

Report: The Bank of Korea has obtained the right to investigate virtual asset entities after financial regulatory authorities have abandoned their opposition

On April 22nd, it was reported that the South Korean Financial Services Commission (FSC) has abandoned its opposition to the Central Bank’s acquisition of the “request for data submission right”, and the Central Bank of Korea will be granted the right to investigate virtual assets. What led to this decision and how does it affect the South Korean regulatory landscape for virtual assets?

Background

According to local reports, the FSC’s decision was made a few weeks after a subcommittee of the Political Affairs Committee of the South Korean Parliament accused the regulatory agency of seeking to become the sole regulator of virtual assets. Before finally agreeing to the central bank’s request, there were multiple conflicts between the FSC and the Central Bank of Korea regarding which of the two institutions should regulate payment settlement.

Central Bank’s Right to Investigate Virtual Assets

On the other hand, the central bank insists on being granted the right to investigate digital assets, as the risks generated by the virtual asset market ultimately threaten financial stability. This request for data submission right grants the Central Bank of Korea the ability to inspect and monitor digital asset-related data from financial institutions, including cryptocurrency exchanges. This authority enables the central bank to supervise digital assets more thoroughly and promote financial stability.

Future Implications

As the FSC has decided to waive its requirements, there are reports that the South Korean National Assembly will continue to develop plans to incorporate the right of the Central Bank of Korea to request data into the Virtual Asset Law. This move signifies a flux in regulatory power dynamics, as it allows the Central Bank of Korea to work in conjunction with the existing cryptocurrency regulatory agencies rather than seeking to replace them.

FAQ

What does the Central Bank of Korea’s request for data submission right mean for digital assets in South Korea?

The granting of this right allows for greater oversight and regulatory control for digital assets in South Korea, promoting financial stability and mitigating risk for investors and institutions alike.

Why was there conflict between the FSC and the Central Bank of Korea regarding digital asset regulation?

Both institutions sought to regulate payment settlement, leading to disagreements and power struggles.

What are some potential implications for the future of virtual asset regulation in South Korea?

With this decision, it appears that regulatory power dynamics will become more collaborative rather than combative. Additionally, the Central Bank of Korea’s increased regulatory involvement may lead to a more comprehensive regulatory framework for digital assets in South Korea.