Crypto monitoring unit needed, Oh Jung-geun says at forum

Finance

Published: 27 Apr. 2022, 18:54

Crypto monitoring unit needed, Oh Jung-geun says at forum

Oh Jung-geun, a member of the 20th Presidential Transition Committee for Balanced National Development, speaks at the Policy Framework for Blockchain and Digital Assets in Korea forum held in central Seoul on Wednesday. [GBC KOREA]

The Yoon Suk-yeol government should establish a separate unit that exclusively monitors abnormal cryptocurrency trading, said Oh Jung-geun, a member of the 20th Presidential Transition Committee for Balanced National Development and chairman of the Korea Financial ICT Convergence Society, at a blockchain forum Wednesday.

The Policy Framework for Blockchain and Digital Assets in Korea forum was hosted by GBC Korea, Ripple and Oxford Metrica, blockchain-based service providers, at Hotel Shilla in central Seoul on Wednesday.

The forum was attended by Kim Byung-joon, chairman of the Presidential Transition Committee for Balanced National Development, and David Schwartz, the chief technology officer of Ripple.

Oh stressed the need to shift the responsibility of banks in monitoring abnormal cryptocurrency trading to a special unit that should be established to oversee cryptocurrency.

"For traditional financial markets, the Korea Financial Intelligence Unit, which is part of the Financial Services Commission, monitors signs of abnormal transactions. But for cryptocurrency, the responsibility is shifted to banks, which has led to criticism," said Oh.

Oh said it would be desirable if a new unit exclusively monitors abnormal trading and banks support their work. He added that an environment that supports the development of cryptocurrency firms should be developed.

"The crypto market in Korea has been in a dark period over the past five years under President Moon Jae-in administration," said Kim from the Presidential Transition Committee, at the forum.

"A majority of cryptocurrency companies have been funding the development of cryptocurrency abroad, like in Singapore and Switzerland. That drained a lot of national wealth," Kim added.

The forum took place two weeks ahead of the inauguration of president-elect Yoon Suk-yeol, who made favorable campaign pledges related to cryptocurrency.

The pledges include allowing initial coin offerings and not imposing taxes on cryptocurrency trading gains of up to 50 million won ($40,000), treating them the same as stock gains.

Although few countries have found a clear answer to their stance on digital assets, decision at the early stages of a technology could change the fate of a country, said lawmaker Yun Chang-hyun of the People Power Party.

The importance of Central Bank Digital Currency (CBDC) was also emphasized at the forum.

"Imagine every major institution in the world able to settle every major fiat asset with every other institution in a compatible jurisdiction in seconds for a penny," Schwartz said.

Ripple built a CBDC solution that enables central banks to create a private, parallel network for CBDC issuance.

Oxford Metrica Chairman Rory Knight mentioned the importance of the involvement of the private sector in developing CBDCs so as to prevent monopoly.

The importance of CBDCs was highlighted by the Bank of Korea Governor Rhee Chang-yong last week. He said the central bank should prepare for a CBDC as if it is a "matter of our survival."

BY JIN MIN-JI [jin.minji@joongang.co.kr]