South Korea’s virtual asset market will reach one quadrillion won ($835 billion) by 2026, Boston Consulting Group (BCG) Korea said on January 25 in its report Future of Asset 2022.
According to the report, the country’s virtual asset market already surpassed 300 trillion won by the end of last year to take up 10 per cent of the global market. With an average annual growth of 20 per cent over the next five years, the virtual asset market will also create 40,000 jobs in the process, BCG Korea said.
The report pointed out that despite the public acceptance of virtual assets as real assets, relevant industries do not seem ready. It said there have been active discussions on virtual assets in the last five years, but it has been difficult to present a clear direction due to differences in the level of understanding and perspectives.
According to BCG’s analysis, the maturity of South Korea’s virtual asset industry is three to five years behind the global standard in the five categories of exchange, issuance, investment and derivatives, custody and payment.
Mentioning that countries such as the US, Japan, Singapore and Switzerland pre-emptively responded to virtual assets and swiftly established regulatory frameworks, the report said the South Korean government and regulators need to set up a new framework for regulation.
The consulting firm explained that virtual assets are currently regulated by the anti-money laundering article under the Act of Reporting and Use of Certain Financial Transaction Information. In order for the cryptocurrency industry to be included in the law, it said the government and lawmakers should consider drafting relevant articles, including virtual assets in the Financial Investment Services and Capital Markets Act and enacting new laws on virtual asset.
“For the next five years, there will be a fierce battle without borders over who will be the next Google and Amazon in the virtual asset industry. In order for Korea to take the lead, the efforts from both the private and public sectors are important,” said Kim Yun-joo, managing director and partner at BCG Korea.
“The rapid strategic response from the traditional financial institutions and existing fintech [companies] as well as emerging virtual asset operators is important. Policies should also take a step toward considering industrial development together rather than focusing on regulatory supervision.”
THE KOREA HERALD/ASIA NEWS NETWORK