As a way to jumpstart its economy amid the coronavirus outbreak, South Korea is temporarily easing its regulations on fintech and ten more sectors.
Fintech is part of the 10 sectors, which were subject to deregulation by South Korea’s Ministry of Economy and Finance. Other sectors include data and artificial intelligence, new medical technology, future mobility, technology entrepreneurialism, resource circulation, e-commerce, logistics, and industrial parks.
Starting March, the ministry will be coming up with a detailed list of the deregulation and review the importance of each sector, a process that will last until June this year. One area that could possibly be a highlight of the deregulation is the embryonic stem cell research, a new medical field in medicine.
The companies under the said ten sectors are expected to develop more new products without any regulatory hurdles. Under the regulatory sandbox, these sectors are exempted from the strict regulations.
Central Bank Digital Currency
The Bank of Korea still sees no need for the establishment of the Central Bank Digital Currency or CBDC. The central bank is still skeptical about the growth of the CBDCs, and its impact on the financial sector. This is despite the growth of the cryptocurrency presence in the region, particularly in its capital city Seoul.
Samsung Pay, one of the leading digital mobile payments available in South Korea offers digital asset functionalities, just like KakaoPay. While digital asset usage is ongoing, it is still limited and not penetrated at all.
Meanwhile, South Korea supports older digital assets for payments like Litecoin and Dogecoin.
South Korea’s current laws on fintech limit the equity investment of non-financial businesses. For the longest time, this has been the reason for the declining growth of financial tech development in the country. With the deregulation move, the government is expected to set up a conflict resolution to meditate the traditional banks from digital financial companies.