The Korea Fintech Industry Association (KORFIN) said on the 3rd that the financial authorities' plan under review to limit major shareholders' equity in virtual asset exchanges to 15%–20% "could hinder digital finance innovation and global competitiveness."
KORFIN said, "The financial authorities have led the digital transition of the financial industry, including easy remittance and payment, innovative financial services, MyData, Open Banking, and the introduction of internet-only banks," adding, "However, contrary to this policy stance, if regulations are introduced to forcibly disperse the ownership structure of private corporations, the foundation for innovation and growth in the domestic digital asset industry could be damaged."
KORFIN said, "Digital assets are already deeply integrated with the financial market, and the existing payment and settlement structure centered on card companies, clearing networks, and merchants is rapidly being reorganized through Blockchain," adding, "New payment models such as NANO payments and real-time automatic settlement are becoming a reality."
KORFIN added, "In this situation, it is hard to find the need for Korea, which has high digital competitiveness, to apply equity cap regulations only to the digital asset industry."
KORFIN said, "Exchanges are the gateway to the global digital asset market and a key infrastructure that connects with the real economy," adding, "They also have strong potential to evolve into next-generation financial platforms that leap over the barriers of borders and accounts."
It continued, "A rigid governance structure that makes it difficult to respond swiftly to a rapidly changing financial environment has also been an important factor behind the slow digital transition and overseas expansion of Korea's financial sector."
As alternatives, KORFIN proposed market-friendly governance improvements, including strengthening market oversight through an initial public offering (IPO), introducing a responsibility structure, imposing ESG (environmental, social, and governance) obligations, and enhancing the independence of outside director appointment procedures.