A South Korean lawmaker has proposed a bill to tighten and regulate cryptocurrencies by amending the country’s Electronic Financial Transaction Act while the country itself seeks to shift into investing in digital currency.
According to Financial News and Seoul Economic Daily, the proposal was put forth this week by Park Yong-Jin, a representative from the Democratic Party.
The law if passed would seek to redefine digital currency, classifying businesses and different individual parties within the community as digital currency traders, brokers, issuers and managers.
It further mandates businesses hold deposits in coldstorage or provide insurance to hedge funds against potential hacking incidents where large sums of crypto are stolen from customers. The goal is to apply a 500 million South Korean ($450,000) capital reserve threshold for any business that operates any form of exchange and to require them to seek government approval from an authority.
The goal is to apply a 500 million South Korean won or ($450,000) capital towards any business that operates any form of cryptocurrency, limiting them with a threshold. Trading service markets would then have to seek approval from a South Korean authority, contradicting the vision of cryptocurrencies’ freedom from the central banks and any permission service.
There are also provisions within the bill that seek to prevent market manipulation and money laundering using digital currencies.
Park is seeking a more regulated atmosphere within the cryptosphere amid recent volatility in the market and the surging prices of top cryptocurrencies like Bitcoin, Ethereum, Steem, and several coin ICOs or IOUs for digital tender.
This proposal follows a recent panel’s decision to argue for regulations covering digital currency.
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The bill is expected to be presented during the National Assembly of South Korea in September, at which point it then needs to seek the approval of the country’s Financial Services Commission.
As reported by CoinDesk, the financial regulator convened its first initiative last November to launch a regulatory policy on cryptocurrency. However, as of today, its policy plans still remain unclear.
Meanwhile, last year in October the chairman of South Korea’s Financial Services Commission (FSC) the government’s top financial regulator, Yim Jong-yong, announced that his department would begin to “Lay the systemic groundwork for the spread of digital currency.”
The project sought to offer three trillion won in funding over the next three years, (US$2.65 billion) to financially support the development of the fintech sector in South Korea.
Then in April, South Korea introduced a new program enabling corporations to allow their customers to load their loose change from small purchases onto prepaid cards. So the country is definitely moving towards abolition of fiat cash; even a Bank of Korea official, Cha Hyeon-jin, said he believes “that the move to go coinless could possibly lead to a “cashless society” reported Yonhaup news agency.