New regulations in South Korea that will allow companies to buy Bitcoin and other cryptocurrencies on their balance sheets were expected to come into effect before the end of the year.
However, according to Sisa Journal, the government has still failed to issue guidelines despite the schedule, leaving the sector in limbo.
Kim Tae-young, a financial analyst at Sisa Journal, said, “The corporate market’s entry into crypto is expected to significantly change the landscape of the industry. Therefore, the guidance issued by financial authorities is critical. Companies are waiting for the go-ahead, but regulation is constantly being postponed.”
Local crypto exchanges say uncertainty is slowing the market. South Korean companies, however, say their competitors in the US and Japan have already amassed Bitcoin treasuries, while they are lagging behind. Current regulations don’t even allow companies to open crypto wallets.
In February, the Financial Services Commission (FSC) announced a roadmap to gradually allow companies to trade crypto assets. The first phase allowed crypto sales to NGOs, government institutions, and universities. It was announced that the next step would be allowing businesses to trade, and the final phase would be allowing banks to open crypto wallets. These announcements prompted major exchanges to develop corporate services.
Market leader Upbit says it currently has over 160 corporate clients, while Bithumb reportedly works with around 100 companies. However, Kim Tae-young said, “The actual number could be much higher, as there are also potential clients who have submitted their documents prior to the approval process.”
Park Ju-young, who runs a media company in Seoul’s Gangnam district, expressed her displeasure at the delay: “In the US and Japan, companies can buy Bitcoin as they please. Why are we being blocked here? The money is ours, and the decision should be ours.”
According to Kim Tae-young, the reason for the delay is the unexpected presidential election in June and the prolonged process of post-election government restructuring.
*This is not investment advice.