South Korea Legitimizes Blockchain Industry With Major New Classification Standards

The South Korean government is drafting major new industry classification standards for the domestic blockchain industry, local crypto news outlet The BChain reports Thursday, July 5.

Three Korean ministries - the National Statistical Office, the Ministry of Science and Technology, and the Ministry of Information and Communication - are said to have been working since the end of last month to produce the final draft of a new blockchain industry classificatory scheme by the end of July.  

The scheme will reportedly serve as a basis for policy making, notably aimed towards “blockchain promotion and regulatory frameworks,” and covers areas including blockchain systems construction, decentralized applications (DApps) development, and cryptocurrency exchanges and transactions.

The draft defines cryptocurrency exchanges as crypto asset exchange and brokerage, which is an important redefinition that “recognizes crypto exchanges as regulated financial institutions,” as opposed to their previous classification as “communication vendors,” according to a news outlet Hacked.

BChain reports that the move is “the first time” the Korean government has recognized the emerging sector as a legitimate industry.

With further input from 43 government ministries and 17 regional municipalities, as well as enterprises and financial institutions, the initiative is said to be drawing on consultations with over 160 institutions to assemble what will be the country’s first statistical survey of the sector.

The government has subdivided its industry classification scheme into three sectors, with ten further subdivisions under the guidance of the Korean Standard Industrial Classification (KSIC). The subdivisions include detailed considerations of blockchain-powered infrastructure for DApps such as EOS, Ethereum and NEO, blockchain-based cloud computing services, and cryptocurrency mining.

The survey is also covering blockchain systems integration into existing industries, including the financial sector, security, insurance, copyright management, supply chain management, medical services, and software development.

Today’s news comes at a pivotal time for the South Korean crypto sphere. Recent high-profile cryptocurrency exchange hacks have necessarily prompted robust responses from local regulators: nonetheless, important positive news has been forthcoming from the government throughout spring, most notably the country’s plans to lift its notorious blanket ban on domestic Initial Coin Offerings (ICOs).

In late June, the Ministry of Science and ICT announced a major Blockchain Technology Development Strategy that aims to raise approximately $207 million by 2022, and since May, the country’s central bank has been exploring the idea of using blockchain in order to realize its project for a “cashless society” by 2020.