South Korea's FSC Unveils Three-Phase Crypto Policy Shift

South Korea's Financial Services Commission (FSC) has announced a significant shift in its cryptocurrency policy, allowing corporations to create real-name bank accounts for converting their crypto holdings back into regular fiat currencies. The move is part of a three-stage plan aimed at promoting stable growth in the digital asset market while maintaining regulatory oversight.

The first phase of the plan, expected to be completed by the second quarter of 2025, will initially be available to law enforcement agencies, non-profit organizations, virtual asset exchanges, and other entities that need accounts to cash out crypto assets. The FSC has already authorized government agencies like the National Tax Service and the Korea Customs Service to access such accounts since last November, enabling them to manage virtual asset transactions connected to legal activities.

The second phase of the plan, scheduled to roll out later in 2025, will allow professional investment corporations, including listed companies and those registered as professional investors under the Capital Market Act, to participate in crypto investing and other related financial activities. However, corporations participating in this stage must comply with newly developed regulations that monitor cross-border transactions, especially the Foreign Exchange Transactions Act, which deals with international virtual asset exchanges.

The FSC's approach is designed to avoid sudden disruptions in the market while promoting stable growth. The first half of 2025 will center on law enforcement and nonprofit entities, followed by the inclusion of professional investors. This phased integration is meant to carefully balance the need for regulatory oversight with the aim to promote corporate participation in the developing digital asset market.

In addition, universities and non-profit organizations receiving cryptocurrency donations will also be able to set up accounts by the second quarter of 2025, further increasing access to virtual asset management.

Kim So-young, Vice Chairwoman of the FSC, stated that the commission would continue to discuss the second stage of virtual asset regulation. Despite earlier reports indicating an accelerated timeline, the FSC clarified that the details of the corporate crypto account rollout were still under review. Therefore, caution was urged as further discussions and regulatory measures are still being finalized to support this transition.