Korea’s FSC Embarks on Developing Regulatory Framework for VASPs

Despite interest expressed by a Japanese lawmaker earlier this month for Japan to establish a strategic Bitcoin reserve, the country’s prime minister has declined to offer support for the idea.Photo by Su San Lee on UnsplashInsufficient informationJapanese crypto media outlet CoinPost reported on Dec. 26 that the country’s prime minister, Shigeru Ishiba, refrained from endorsing the notion of a Japanese strategic Bitcoin reserve on the basis that he and his government lack sufficient information on the subject. With that, Ishiba feels that it’s “difficult for the government to express its views” on the matter. The Japanese prime minister was prompted to offer his views on the subject having been queried by Japanese Member of Parliament (MP), Satoshi Hamada. During a question and answer session earlier this month, Hamada cited the United States and Brazil as examples of states that are currently considering the addition of Bitcoin as a reserve asset.  The Japanese lawmaker suggested that policymakers in those countries were leaning towards the consideration of Bitcoin as a hedge against economic risks, and that on that basis, he believed that the Japanese government should give the use of Bitcoin as a national reserve asset consideration. Hamada stated: “I think Japan should follow the example of the United States and consider turning some of its foreign exchange reserves into crypto assets such as Bitcoin.” Ishiba has responded by stating that his government lacks sufficient information relative to this “movement of introducing Bitcoin reserves that the United States and other countries are proceeding with.” Additionally, the Japanese government maintains that stability and liquidity are of paramount importance when it comes to the country’s foreign exchange reserves. With those factors in mind, it believes that Bitcoin is incompatible due to its price volatility. Unsustainable debt levels Some proponents of Bitcoin suggest that it offers a way forward for countries that have developed an unsustainable level of debt. In an X post published on Dec. 27, Thomas Jeegers, chief financial officer (CFO) at Swiss Bitcoin-only app enterprise Relai, set out a case for Bitcoin on that basis. Jeegers outlined that the United States has a debt of $36 trillion, accounting for 120% of gross domestic product (GDP).  He describes the Japanese scenario as being considerably worse, where the country’s debt accounts for 200% of GDP. Jeegers forecasts that the trajectory is unsustainable, with debt having grown “far beyond manageable levels.” The Relai CFO warns that the financial world is at breaking point and “it’s not a matter of 'if' but 'when' the system buckles under its own weight.” Earlier this month, investment manager VanEck published a report claiming that a strategic Bitcoin reserve could facilitate the U.S. in reducing its national debt by up to 36% by 2050. Like Japan, Russia has also decided against a strategic Bitcoin reserve. Although Finance Minister Anton Siluanov pointed towards Bitcoin’s unit price volatility being an issue, he is open to reassessing the matter in the future.

NEOPIN teams up with Project SEED to propel growth of Web3 gaming ecosystemCentralized decentralized finance (CeDeFi) protocol NEOPIN has partnered with Project SEED — a blockchain gaming ecosystem based in the United Arab Emirates (UAE) — to grow the global Web3 gaming ecosystem, according to South Korean news outlet News1. NEOPIN plans to serve as a bridge between Project SEED and the IP owners and game studios within its ecosystem, facilitating the creation of more global Web3 games.Photo by Mateo on Unsplash“Connecting notable IPs and game studios to gamify Web3 holds significant meaning beyond just securing well-made Web3 games. We expect to diversify the genres and improve the qualitative standards of Web3 games in collaboration with Project SEED,” said Kim Yong-gi, CEO of NEOPIN.Pioneering Web3 gaming excellenceLed by a team of experts from various cryptocurrency exchanges such as Binance and Crypto.com, Project SEED is the developer behind the popular Web3 action role-playing game (RPG) Outland Odyssey. The firm also operates the Grow Program, which was launched in 2021 to incubate blockchain game projects and allow builders to concentrate their efforts on developing high-quality games. Next year, Project SEED plans to unveil its launchpad platform Seed Launcher as part of the Grow Program to aid gaming finance (GameFi) projects in raising funds and discover promising projects worth investing in.Under the newest partnership, NEOPIN’s CeDeFi wallet function will be integrated into Web3 games and NFT projects that are launched through the Grow Program and Seed Launcher platform, driving worldwide user acquisition and promoting the launch of DeFi products on NEOPIN.“We will leverage NEOPIN’s wallet service, network and blockchain expertise to develop high-quality games for diverse users. We plan to strengthen our capabilities to provide benefits to developers, IP owners and gamers alike,” said Project SEED CEO Liko Subakti.NEOPIN’s blockchain journeySince 2017, NEOPIN has accumulated its blockchain expertise and technology by serving as a node validator in multiple global blockchain projects, including Ethereum, Tron, Cardano and Cosmos. Launched last year, its CeDeFi protocol aims to provide Web3 users with a safe and convenient non-custodial DeFi platform.Earlier this year, the company was selected to participate in the Innovative Program of the Abu Dhabi Investment Office (ADIO), attracting a series of investments. It is also working with the Abu Dhabi Global Market (ADGM), an international financial center and free zone in the UAE, to create the world’s first DeFi regulations through a public-private partnership.

Kyobo Life Insurance, one of South Korea’s largest life insurers, has become a participant in the recently launched public testnet for Circle Internet Group’s Arc. This new open layer-1 blockchain network aims to serve a broad range of use cases, including lending, capital markets, foreign exchange (FX), and global payments.Photo by Kindel Media on PexelsNotable global participants in the Arc networkAccording to a press release from Circle, published on Oct. 28, multiple prominent banks and asset managers are also engaging with the Arc network. Kyobo Life stands as the only South Korean entity involved in the initiative. Other notable global participants include BlackRock, Deutsche Bank, Goldman Sachs, SBI Holdings, and Standard Chartered. This move comes on the heels of Kyobo Life’s earlier participation in a stablecoin project spearheaded by the Seoul-based Open Blockchain & Decentralized Identifier (DID) Association. This highlights the insurer’s growing interest in exploring business opportunities within the digital assets space. Korean crypto exchanges step up oversightAs cryptocurrencies gain increasing recognition as a new asset class, South Korean exchanges have become more vigilant in monitoring user activities, partly to curb potential criminal behavior. A report by Money Today revealed that over the past six years, local trading platforms have halted a total of 82.9 billion won ($58.1 billion) in crypto withdrawals. Among these, Bithumb accounted for the largest share, suspending withdrawals totaling 50.5 billion won ($35.4 million) from 2020 to September 2025. Upbit suspended 25.6 billion won ($18 billion) in the same period, while other exchanges like Coinone, Korbit, and Gopax reported more modest suspensions. These actions are largely in response to the Virtual Asset User Protection Act, which came into effect in July 2024. The Act aims to enhance oversight and safeguard consumers, reflecting the government’s intent to regulate the sector more tightly. Surge in Korea-Cambodia stablecoin tradingParallel to these regulatory developments, a dramatic surge in stablecoin trading volume has been observed between South Korea and Cambodia. According to data from the Financial Supervisory Service (FSS) reported by the Seoul Shinmun, transactions between five major South Korean exchanges and Cambodia’s Huione Guarantee skyrocketed to 12.8 billion won ($8.98 million) in 2024, marking a staggering 1,400-fold increase compared to just 9.22 million won ($6,500) in 2023. This rise in activity coincides with recently uncovered criminal cases originating from Cambodia and has raised concerns about illicit practices within the crypto market. In response to these concerns, crypto exchanges are bolstering their efforts to cooperate with law enforcement. Binance, the world’s largest crypto exchange by trading volume, was recently honored with a commendation by the South Korean Minister of the Interior and Safety for its contributions to enhancing cybercrime investigations and administrative capabilities. This accolade comes amid Binance’s increasing presence in South Korea. Binance, which had acquired Gopax ahead of regulatory approval, has now received clearance from local financial authorities to become the Korean trading platform’s largest shareholder. Public sentiment on Binance’s acquisition of GopaxA recent survey conducted by CoinNess and the community-voting app Cratos, which polled 2,000 South Koreans, provided insights into the public’s perception of Binance’s acquisition of Gopax. Among respondents, 38.8% indicated that their decision to use the rebranded platform would depend on the benefits it offered compared to other exchanges, while 23.6% said they were already planning to use it. Together, these figures suggest that 62.4% of participants are open to the platform, although some are conditioned on its advantages. However, 27.5% rejected the platform entirely, and 10.2% stated they do not use local exchanges at all. As South Korea deepens its role in the global digital asset ecosystem, its growing participation in initiatives like Circle’s Arc network reflects an ambition to align with international finance trends. At the same time, stricter oversight and cross-border monitoring signal a firm commitment to transparency. The balance it strikes between innovation and regulation will define its path in the global crypto arena.