"When will the Digital Asset Basic Act pass? Will a market for perpetual futures open in Korea as well?"
These were the questions thrown at me, one after another, by executives at foreign companies I met at a recent blockchain event. I had gone there to conduct interviews and instead found myself fielding questions. Their attention was fixed on why the Korean government remains conservative toward digital assets and when the basic law will clear the National Assembly. Whether the range of cryptocurrency derivatives traded overseas could be permitted in Korea was another point of interest.
It is not that they lack interest in the Korean market. Quite the opposite. Domestic financial firms and fintech companies are eager to pursue digital asset businesses, and that enthusiasm has drawn the attention of foreign companies. The problem is that there is not much they can actually do in Korea right now.
An official at one global blockchain company noted that Korean companies move nimbly but are clearly aware of the limits of the domestic market. Rather than wait for regulation, the official said, they are choosing a strategy of launching services abroad first.
This is not confined to the cryptocurrency market. The situation is much the same for tokenized securities. The market is set to open next February, but compared with global markets, the permitted issuance methods and the range of assets that can be tokenized remain limited. An official at Hanwha Investment & Securities struck the same note at a recent event, explaining the company's move overseas by saying it had concluded that "preparing first in the global market is better than being No. 1 in Korea."
Companies will not wait for regulations to be put in place. They move first toward markets where business is possible. The longer regulatory work is delayed, the more even domestic companies will test their business models, win customers and accumulate experience abroad.
The problem is that with too few options to try new financial services at home, overseas markets have in effect become the first testing ground. With no regulatory foundation in place, companies have little choice but to look outward.
That is precisely why the pace of building out digital asset regulation matters. Clarifying the scope of business companies can conduct in Korea, and the responsibilities that come with it, goes beyond simply supporting the cryptocurrency industry. It will determine whether next-generation digital financial services can start and grow in Korea first.
