Korea's Pilot Program on Corporate Investments in Cryptocurrencies Is a Strong Signal That Digital Assets Are Becoming Integrated

Korea's pilot program on corporate investments in cryptocurrencies is a strong signal that digital assets are becoming integrated into regulated financial markets

A U.S. crypto expert has praised Korea’s new pilot program on corporations’ cryptocurrency investments as a strong signal that digital assets are becoming integrated into the regulated financial markets.

The Financial Services Commission (FSC) announced on March 12 that detailed guidelines for companies’ investments in virtual assets will be available in April.

This follows June’s news that the government would be rolling out a measure allowing non-profit entities to open real-name accounts for crypto assets, in addition to a service for converting crypto to cash for salary payments and taxes.

The commission said Monday that the non-profit entities and crypto exchanges will have the guidelines as early as next month, while the timeframe will be extended for listed firms and investment firms by the third quarter of this year.

Financial Services Commission Vice Chairman Kim So-young speaks during a meeting at Seoul Government Complex, March 12, 2024. (Yonhap)

At a meeting with crypto exchange officials, the commission’s vice chairman, Kim So-young, said the service will be offered to non-profit entities and crypto exchanges by June, while the scope will be expanded to include 3,500 listed firms and investment firms by the year’s end.

Those present at the meeting included officials from the Digital Asset eXchange Alliance and four crypto exchanges—Upbit, Bithumb, Beeblock and Wavebridge—in addition to custody service providers, the Korean Federation of Banks and commercial lenders issuing real-name accounts, including Kbank and Shinhan Bank.

The announcement is the latest development in the eased crypto market regulations.

After years of strict oversight, the government has recently moved to integrate cryptocurrencies into the mainstream financial system.

Earlier this year, the commission announced plans to introduce a limited pilot program for

After the measure was approved by the National Assembly in December, the commission has been working to put together the final details of the program.

The initiative will allow non-profit entities to open non-commercial real-name accounts at commercial lenders for the purpose of donating to non-profits or for service-related expenses.

The move is part of broader efforts to integrate cryptocurrencies into the mainstream financial system and create a more favorable environment for the industry.

The commission has also been working to develop a regulatory framework for crypto exchanges and to promote the use of blockchain technology for financial services.

As these changes unfold, John Matheson, co-founder and managing director of Asset Token Ventures and an expert in both certified public accounting and law, shared his insights on the implications of Korea’s approach to crypto regulation.

"We're observing a global trend towards integrating digital assets into traditional financial markets, and Korea appears to be a step ahead in this journey," said Matheson, whose firm is based in the U.S. Virgin Islands and focuses on introducing various real-world asset (RWA) tokens, with its flagship product being the mortgage-backed securities-oriented MBSToken. This provides security, transparency and stability in the cryptocurrency market.

"The pilot program on corporate investments in cryptocurrencies is a strong signal, especially with the emphasis on seamless participation and interoperability with global markets."

The country’s smallest commercial lender, Korea Development Bank, is also planning to provide a limited service for converting crypto to cash for salary payments and taxes from June, while the commission will be focusing on instituting an accounting standard for crypto assets held by banks.

The Financial Services Commission (FSC) in Korea is rolling out a pilot program to permit non-profit entities to open non-commercial real-name accounts at commercial lenders. The initiative is part of broader efforts to integrate cryptocurrencies into the mainstream financial system and create a more favorable environment for the industry.

"The initiative will be kicking off with non-profit entities and crypto exchanges, with the timeframe set for June. For listed firms and investment firms, the plan is to expand the service by the third quarter of this year," a commission official explained.

The move is part of a broader effort by the South Korean government to promote the use of blockchain technology and digital assets. Earlier this year, the government announced that it would be investing 1 trillion won ($793 million) over five years to create a "digital asset ecosystem."

The government is also working to develop a regulatory framework for crypto exchanges and to promote the use of blockchain technology for financial services.

"The Korean government's approach demonstrates that digital assets can coexist with traditional finance under clear regulations, providing a blueprint for other nations," Matheson added. "It also indicates that crypto trading will become more mainstream, increasing institutional participation and investor confidence. As we see the U.S. Congress and President [Donald] Trump forming a working group to discuss a regulatory framework for digital assets, the global landscape is converging on this critical topic."

The administration is planning to bring together members of Congress, federal regulatory agencies, state regulators and various crypto industry participants to advise the president on how best to regulate the industry