According to the Polymesh report titled “Regulatory Developments in Digital Assets”, South Korea has taken a significant step in the crypto industry by passing the “Digital Assets Basic Law” (DABA). This Law presents 17 legislative proposals aimed at balancing the development of blockchain with the protection of investors.

The Law, which is expected to become law in June 2024, includes measures such as capital reserve requirements for exchanges and the establishment of a separate market for digital securities.

Shinhan Bank, the country’s oldest bank, has also become an equity investor in Korea Digital Asset Custody Co. (KDAC), a consortium for startups providing custody solutions for digital assets. Shinhan Securities Co., Ltd, part of Shinhan Financial Group, has launched its “STO Alliance”, a consultative body for security token development.

However, the road to digital asset regulation in South Korea has not been without its resistance. The Financial Services Commission (FSC) and the Bank of Korea (BoK) have been in a dispute over the regulatory supremacy of digital assets. The BoK has demanded the right to access data from digital asset service providers, arguing that digital assets can pose a threat to financial stability.

The only South Korean legislation that explicitly defines and regulates digital assets is an amendment that brings digital assets within the scope of the Specific Financial Information Use and Reporting Act, known as the “Anti-Money Laundering Act.”

In a unique combination of culture and technology, South Korea plans to use blockchain technology to spread its popular culture, known as “K culture.” The city of Busan plans to implement a city-backed decentralized digital commodity exchange that will focus on tokenized products that tap into the city’s cultural strengths.

In related news, Cube Entertainment, the fifth largest K-pop company, has moved to the metaverse through a partnership with Animoca Brand’s gaming subsidiary, The Sandbox. The partnership will see Cube create a “K culture complex” filled with Korean cultural content in a virtual land in The Sandbox.

Finally, the global custodian of digital assets BDACS has announced its intention to establish a project for the tokenization of Korean culture built on the Polymesh blockchain. This move aims to unlock new engagement for fans, artists, producers, and investors.

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