Banking Sector Proposes 'Allowing Entry into the Virtual Asset Industry, including Stablecoins' to the Lee Jae-myung Administration

The banking sector proposed to the new government to allow banks to enter the virtual asset (cryptocurrency) business, including stablecoins (virtual assets pegged to legal tender).

According to the industry on the 23rd (Korean time), the Korea Federation of Banks collected opinions from member banks and submitted the final report titled 'Recommendations from the Banking Sector for Economic Circulation and Financial Industry Innovation' to the National Planning Committee on the 19th.

The report included specific demands to ease various regulations that hinder banks from entering new business areas.

The banking sector stated, "There is a need to improve legal and institutional restrictions so that banks with high public credibility, excellent consumer protection standards, and strong customer accessibility can enter digital asset-related businesses."

They suggested revising the Banking Act to add digital asset business to banks' concurrent businesses and amending the 'Fintech (Financial Technology) Investment Guidelines for Financial Companies' to expand eligible Fintech investment targets to include digital asset and blockchain companies.

Notably, the banking sector referred to Min Byung-duk (Democratic Party)'s recently proposed Digital Asset Basic Act on the 10th, indicating a willingness to issue stablecoins. The banking sector emphasized, "With the appropriate legal authorization, banks would be able to issue stablecoins and engage in digital asset custody services."

Additionally, the banking sector requested that everyday services and ICT (information and communication technology), which help enhance customer convenience and platform competitiveness, be recognized as ancillary businesses. They also called for the regulation governing ancillary businesses and subsidiaries to shift to a 'principles-based regulation' approach in line with the growing convergence among industries.

Distribution, transportation, travel, the metaverse (three-dimensional virtual world), and design—industries with high synergy potential with finance—were mentioned as priority sectors for liberalization.