South Korea's People Power Party Announces Seven-Point Plan to Reform Virtual Asset Market

South Korea's ruling People Power Party has announced a comprehensive seven-point plan to reform the country's virtual asset market. This initiative includes the introduction of spot exchange-traded funds (ETFs) for virtual assets, the legalization of Security Token Offerings (STOs), and the establishment of a regulatory framework for stablecoins. The plan also seeks to abolish the "one exchange, one bank" policy, which has been a significant barrier to the growth of the virtual asset market in South Korea.

The approval of spot virtual asset ETF trading is a key component of the plan, with the ruling party committing to open this trading within the year. This move is expected to provide investors with more diverse investment options and increase liquidity in the market. The legalization of STOs will allow companies to raise capital through the issuance of tokens that represent ownership in an asset, providing a new avenue for fundraising in the digital economy.

The regulatory framework for stablecoins is another critical aspect of the plan. Stablecoins, which are cryptocurrencies pegged to the value of a stable asset such as the US dollar, have gained popularity due to their stability and utility in transactions. The new framework aims to ensure the stability and security of stablecoins, protecting investors and promoting their use in the market.

The abolition of the "one exchange, one bank" policy is also a significant step towards liberalizing the virtual asset market. This policy has limited the number of exchanges that can operate in South Korea, restricting competition and innovation. By lifting this restriction, the government aims to foster a more competitive and dynamic market, attracting more investors and companies to participate.

The plan also includes measures to promote investor protection and industry innovation. The ruling party has emphasized the importance of clear supervision and the need to address the challenges posed by the lack of regulatory clarity. By promoting a healthy and sustainable digital asset market, the government aims to position South Korea as a global leader in the virtual asset industry.

The introduction of these policies is expected to have a significant impact on the virtual asset market in South Korea. The approval of spot ETF trading and the legalization of STOs will provide new investment opportunities and increase market liquidity. The regulatory framework for stablecoins will enhance investor confidence and promote the use of stablecoins in transactions. The abolition of the "one exchange, one bank" policy will foster competition and innovation, attracting more participants to the market. Overall, these measures are expected to contribute to the growth and development of the virtual asset industry in South Korea, positioning the country as a leader in the global digital economy.