The People Power Party in South Korea, led by lawmaker Yoon Chang-hyun, planned to announce a commitment regarding virtual assets last week, but its statement was postponed indefinitely.
South Korean politics and cryptocurrencies: Delay and reasons
The People Power Party in South Korea, under the leadership of lawmaker Yoon Chang-hyun, faces public scrutiny after postponing its pre-election promise regarding cryptocurrencies indefinitely. This promise included efforts to ease existing regulations and restrictions for cryptocurrencies, including lifting the ban on local spot bitcoin ETFs. The delay was justified by the need for further coordination with government and financial authorities, indicating significant discrepancies in approaches to regulating virtual assets.
Impact on investors and regulator's stance
The national financial regulator reiterated its ban on cryptocurrency ETFs in January, arguing that virtual assets do not meet the standards for underlying assets set forth in the capital markets law. This move comes despite the recent approval of a spot bitcoin ETF by the United States Securities and Exchange Commission (SEC), signaling increased acceptance of cryptocurrencies on the international stage. However, the South Korean Financial Services Commission maintains a cautious stance, citing investment risks associated with virtual assets and remaining in a position to protect local investors from potential instabilities.
Political promises and international perspectives
The recent announcement by the opposition Democratic Party regarding its promises concerning crypto ETFs highlights growing political competition in this area as the general elections scheduled for April 10 approach. Meanwhile, South Korea's Financial Supervisory Service (FSS) is preparing to gain an international perspective by requesting guidance from the United States Securities and Exchange Commission on spot bitcoin ETFs, indicating openness to dialogue and potential review of existing positions based on international trends and standard practices.
This delay and related political maneuvering reveal the complexity of the relationship between government regulation, financial innovation, and political promises. While regulators and politicians weigh potential risks and benefits, investors and cryptocurrency companies remain in anticipation of clearer and more stable rules for their operations and investments.
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