Financial Services Commission's fintech strategy ignores blockchain

A forum marking the first anniversary of Korea University's Blockchain Research Institute took place at the university on Thursday. During the event, Kwon Dae-young, head of the financial innovation support group under the Financial Services Commission shared the recent progress in discussions regarding fintech and blockchain within the government. The government's fintech strategy Currently, 58 percent of the financial sector has established a team dedicated to digital services. Financial companies have also set roughly 8.23 billion won ($6.9 million) aside to invest in that digital transition. "New players, which are [different from] existing financial companies, are entering the financial market," Kwon said. "The government is closely monitoring new trends created by the so-called fourth industrial revolution in the financial market." The government is discussing ways to help traditional financial companies, fintech start-ups, e-commerce companies, giant IT platform operators, and IT equipment makers work together. It is planning on lowering the entry barrier for start-ups by loosening capital requirements to start financial businesses. It will also continue introducing regulatory sandbox programs meant to accelerate the development of new technologies by giving limited regulatory exemptions all year round. The government is also pursuing the "My Data" initiative, which enables individuals to take more comprehensive care of their personal data scattered among different institutions and companies. "The My Data initiative related bills will likely pass in the latter half of the year," Kwon said. Blockchain comments "Officials at the FSC have different ideas on blockchain," Kwon said. "Also, we are still taking precautions about illegal activities or fraud that can take place in the process of initial coin offerings." Kwon, however, said that the government plans to support the research and development of blockchain. "We have doubled the budget for R&D in [blockchain-related] areas this year to 14.3 billion won," Kwon said. "Blockchain technology needs to gradually develop by making practical use cases in real life." He added that the international authorities are close to coming to a consensus on how to regulate money laundering using cryptocurrencies. "A related bill has already been introduced in Korea," Kwon said. "If an international consensus is drawn related to dealing with cryptocurrencies, related bills will soon be in place in Korea as well." Parker’s note: Kim Jong-hyun, a project manager at the Ministry of Science and ICT, also participated in Thursday’s forum. "The [government] has selected 12 major tasks regarding blockchain and set aside 7.8 billion won in a broad budget," Kim said. The comment shows that ministries are constantly making strategies regarding blockchain, or at least watching out for ways to secure private data in fintech businesses, on top of the My Data initiative the government is pursuing. As blockchain protects data by using distributed nodes, it has great potential to be a part of all technologies developed in the fourth industrial revolution. Like Kwon said, we hope blockchain can be practically useful in our everyday lives by overcoming technological and legal obstacles.

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