The 4th Industrial Revolution Commission under the Presidential Office suggested that the Korean government allow financial institutions to launch cryptocurrency-related products, such as Bitcoin derivatives, as a medium- and long-term strategy for the institutionalization of cryptocurrencies.
As digital finance is emerging as a major keyword for both the financial sector and the blockchain and cryptocurrency industry, the commission advised the Korean government to allow financial companies to release futures products based on Bitcoin prices, as the U.S. financial authorities did. In addition, the commission recommended that the financial sector develop and introduce a Korean custody solution to avoid relying solely on foreign custodians in the process of handling crypto assets.
The 4th Industrial Revolution Commission published a document containing its policy suggestions, including the unification of different terms such as cryptocurrencies and virtual currencies into crypto assets, listing of Bitcoin directly on Korea Exchange (KRX), and launching Bitcoin derivatives.
Referring to the initiatives of U.S. and Swiss financial authorities, the commission advised the Korean government to consider introducing business licenses or guidelines for crypto-asset exchanges and integrating crypto-related products into the financial system in the mid- to long- term, “As of May 2019, daily crypto-asset trade hit more than 80 trillion won (about US$69 billion) in the world, so it is no longer possible to stop crypto-asset trade.”
The commission also suggested that the Korean government allow financial institutions to handle crypto assets and encourage them to develop Korean custody technology. “Participants in the traditional capital market such as securities firms and banks should develop and introduce domestic custody solutions to handle crypto assets so that the Korean crypto-asset custody market will not depend on foreign countries,” the commission added. “The Korean government has to gradually allow institutional investors to deal in crypto assets and promote over the counter (OTC) desks dedicated to institutional investors’ trade.”