Korea’s blockchain classification initiative marks the first time the government has recognized the sector as a legitimate industry.
The South Korean government is set to establish new blockchain classification standards, recognizing the sector as a legitimate industry for the first time, local media outlet TheBchain reported on Thursday.
Under the new system, the blockchain industry will be divided into three sections and subdivided into a further ten. The first main classification area will cover blockchain-powered infrastructure for decentralized apps (DApps), such as Ethereum and EOS. The second will include cryptocurrency mining activities and the third will classify blockchain cloud hosting services and cryptocurrency exchanges. The draft will see the latter treated as “regulated financial institutions”, rather than “communication vendors”, as they are currently defined.
According to the publication, three South Korean ministries — the National Statistical Office, the Ministry of Science and Technology and the Ministry of Information and Communication — have been working on the final draft of the scheme since the end of June. Opinions of more than 160 institutions have been collected as part of the legislative effort.
“We are considering a plan to release the standard later this month [translated from Korean],” an unnamed government official was quoted as saying. “It is difficult to talk about details.”
South Korea is not the only country that is considering changing the way it regulates the digital assets sector. Earlier this week, local media reported that Japan’s Financial Services Agency (FSA) might revamp the legal framework for regulation of cryptocurrency exchanges, considering them a financial product, rather than a form of payment similar to electronic money that they are currently treated as.
Easing Regulations
South Korean lawmakers and regulators appear to be easing their stance on cryptocurrencies. In May, the South Korea National Assembly proposed to lift the ban on Initial Coin Offerings (ICOs) in the country.
The ban, which came into force in September 2017, effectively outlawed ICOs in South Korea, following concerns over a lack of regulation and limited investor protection. However, according to recent media reports, proposals have been put forward that would see ICOs reintroduced, with new regulation and concerning domestic ICOs only.
South Korea is among the world’s most active crypto trading markets and has seen cryptocurrencies firmly permeating into Korean society among everyday adopters and retail investors. The Asian country accounts for about 12% of trading volumes globally, according to analysts at Citi.
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