The finance regulator in South Korea has suggested caution with respect to allowing domestic companies to enter the crypto market.
South Korea’s Financial Services Commission (FSC) has asked to be cautious about entering the crypto market with respect to domestic companies. Kim Joo-Hyun, Chairman of the FSC, made the comments at a financial strategy forum held in Jung-gu, Seoul.
Joo-Hyun insisted that more discussion was needed to allow domestic companies to enter the crypto market. It’s understandable why Joo-Hyun would be a little cautious, given that there are risks involved. He was quoted as saying,
“It is true that new trials and policies are needed, but as social conflicts are large and opinions are divided, there is a need for further discussion about what position Korea will take…technical supplements will be discussed in consideration of the specifics of issuance and distribution of virtual assets. It is being discussed in the Office of Government Policy Coordination with the Ministry of SMEs and Startups.”
However, South Korea has also been keen on fostering innovation and encouraging the development of web3 and the metaverse. The country wants to tap into the technology’s potential to boost its economy.
FSC shows support for South Korea crypto markets
Despite the request for caution, the FSC has become more supportive of the crypto market in recent months. The authority has even said that it would promote the use of the tech when necessary and if it would protect investors from any harm.
The FSC is also considering whether to go back on its ban of forbidding banks and financial institutions from facilitating crypto transactions. As it stands, it is not looking to pass new regulations and will instead make use of existing laws.
South Korea is a tech-savvy country, with a large portion of the younger population interested in cryptocurrency. It’s home to some of the biggest electronics companies in the world, who have also shown interest in the crypto industry.
Korean investors have comparatively a high-risk appetite
Korean media outlets are reporting that South Korean crypto investors have a much higher risk appetite than their global counterparts. Bitcoin and ether make up only roughly 26% of their portfolios, meaning that they spend their capital on other tokens, which are more subject 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.