According to a South Korean news report, the South Korean Central Bank (the “Bank”) indicated that Initial Coin Offerings (“ICOs”) will be allowed under the European Union (“EU”) Digital Assets Framework Act, of which the proposed Market in Crypto-Assets (“MiCA”) Regulation is part of. It is expected to be introduced in 2023 and implemented a year afterwards. The Bank discussed ICOs in relation to its upcoming cryptocurrency regulation, which may possibly adopt elements from the MiCA proposal.
In this regard, the Bank said that a balanced approach is needed in order to foster a sound market through the introduction of crypto-asset regulatory system and to promote blockchain and crypto-asset innovation. The Bank also advised that once the Digital Assets Framework is enacted, it is necessary to institutionally re-allow domestic crypto-asset ICOs.
This comes in light of South Korea controversially banning ICOs back in 2017. Since ICOs were banned, South Korean crypto firms issued new crypto-assets abroad and sold them in South Korea through domestic exchanges.
The Bank also commented on the MiCA approach for stablecoin regulation, stating that it is imperative that when the Digital Assets Framework Act is enacted, the Bank’s roles and responsibilities as the monetary authority, are specified.
For assistance on the above or any further information please feel free to contact us.
