South Korean finance giants eye digital asset exchanges by first half of 2023

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A new wave of digital asset exchanges is about to hit the South Korean market as several traditional financial firms have entered into talks with regulators to obtain the necessary licenses to establish digital asset exchanges which will start operating in the first half of 2023.

According to a report local news outlet NewsPim, the initiative will be spearheaded by the Korea Financial Investment Association (KOFIA). The self-regulatory body seeks to create business models and independent virtual assets for registered companies under its supervision, in accordance with the Financial Investment Services and Capital Markets Act.

A total of seven companies will participate in the initiative, but only Mirae Assets Securities, South Korea’s largest investment bank and securities brokerage firm, and Samsung Securities have so far been confirmed.

“Currently, the discussions necessary for the establishment are being finalized,” said a manager of one of the firms.

Mirae Assets Securities is working on the scheme through its subsidiary, Mirae Asset Consulting. The company plans to manage various digital assets on its exchange, including BTC, Ethereum, and non-fungible or NFT tokens.

Meanwhile, Samsung Securities, a subsidiary of Samsung Future Inc, is looking to enter the blockchain and smart contract-based security token business. The company reportedly halted plans in this direction late last year after failing to find suitable manpower to take over the development and operation of the security token trading platform.

South Korea’s upcoming digital asset regulations will make the initiative possible

The launch of digital asset exchanges is expected to be made possible by the planned enactment by the Financial Services Commission (FSC) of the “Virtual Currency (Cryptocurrency) Business Rights Act” – a bill that has since been requested. long by KOFIA – under the Digital Assets Basic Act (DABA).

The law will allow digital assets to be regulated under a single framework and divided into type-secured and non-secured tokens. It will also specify whether the Domestic Virtual Assets are securities.

Notably, the DABA bill received overwhelming support from President Yoon Suk-yeol, who took the presidential seat in May. In line with his campaign promises to ease regulations on digital assets in South Korea, the leader said the government would not tax the industry until proper regulations were in place, which is expected to happen in 2025.

Interest in digital assets by the big guns of finance indicates growing confidence in the president’s resolve. Although players like Samsung are not new to blockchain technology, it has already partnered with the government to work on the country’s central bank digital currency.

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