Global Push to Elevate Digital Assets as a “National Strategy” ... South Korea Must Break Out of High Capability, Low Transition

An argument was raised that digital assets have emerged as a core agenda item in the monetary, financial, and industrial strategies of major countries. It was also argued that South Korea needs to quickly establish a national vision, along with practical policy alternatives.

Hashed Open Research (HOR) published a report titled "National Strategy and the Evolution of Markets Through Digital Asset Policy." The report compared five regions: the United States, the European Union (EU), Japan, China, and South Korea.

Hashed said major countries view digital assets as a key element of the economic order that changes asset ownership records, funding, and payment structures. It also said they see digital assets as a design element of their national future visions.

The report pointed out that major countries are quickly securing their economic foundations and competitiveness through the use of digital assets. By contrast, it said South Korea lacks a national consensus on what it wants to achieve with digital assets, and argued that practical policy alternatives and a national vision need to be prepared without delay.

The report said the character of a national vision related to digital assets is not an abstract slogan. It also summarized the core of such a vision as setting priorities and goals for corporate fundraising, setting priorities and goals for the competitiveness of the financial industry, setting priorities and goals for the digital transformation of industries, and setting priorities and goals for linking with international markets.

The report assessed that the United States is making use of spot Bitcoin exchange-traded funds (ETF) and tokenized securities. It also said institutional funds are increasingly flowing into the digital asset market in the United States, with the spread of dollar-pegged stablecoins serving as that foundation.

The report analyzed that the U.S. strategy is to strengthen the link between existing capital markets and the digital asset market, and to sustain the dollar's international influence in the digital financial environment. By contrast, it explained, the EU has the comprehensive crypto-asset regulatory framework, "MiCA," and is using MiCA to unify regional market regulatory standards and lead global regulatory standards.

The report also noted, however, that in the EU case, while the EU's digital payment infrastructure is growing, the influence of dollar-pegged stablecoins is expanding in actual payments and settlement. It added that the growth of payment infrastructure and the strengthening of monetary sovereignty are not automatically connected.

Japan is pursuing the development of digital assets under government leadership, with major financial groups and companies at the center. Japan is expanding the linkage between digital assets and existing industries in areas such as payments, custody, and content IP.

Japan is clarifying responsibilities and roles related to digital assets within the existing financial system while simultaneously building institutions and industrial foundations. In this way, Japan is advancing digital asset development by organizing roles within the existing financial system and working on institutional and industrial foundations at the same time.

China has adopted a dual strategy. Mainland China is restricting virtual asset trading for the purpose of financial risk management and pursuing the development of "industrial blockchain," while Hong Kong is pursuing "licensed trading and asset tokenization" to create a regulated environment and promote connections between international capital and the digital asset market.

Against this backdrop, HOR said that although South Korea has world-class IT infrastructure and a competitive content industry base, it has not sufficiently connected those capabilities to institutional competitiveness in the digital asset industry. HOR described South Korea's condition as "high capability, low transition."

The article points out that even though South Korea has strong technological and industrial capabilities, delays in policy coordination among ministries and delays in institutional improvements are preventing the country from fully realizing its market potential.

The report presents the establishment of an execution system that connects policy and markets for linking pilot projects and institutional improvements to actual commercialization as a task for South Korea. It also said that a comprehensive integrated system design for payments and asset markets, as well as the opening of shared infrastructure, is needed.

It also proposed that the goal should be an environment in which various private services compete on the basis of open shared infrastructure. It said measures are also needed to prevent the completion of the PoC stage from ending there and to link it to commercialization.

The report explains that a clear transition path must be prepared from the early stages of a project. The point is that institutions and execution must be connected so that pilot projects and institutional improvements lead to actual commercialization.

HOR then said it is necessary to consider leading countries that are using digital assets as a national strategy. It emphasized that South Korea needs to set digital assets as a core of future national competitiveness and design a national-level strategy, and that it needs policy execution capability to overcome fragmented and piecemeal policies and ensure that technological and market changes lead to real industrial change.

Source: TECHWORLD · Lee Gwang-jae
Original: https://www.epnc.co.kr/news/articleView.html?idxno=407909

References

• https://www.epnc.co.kr/news/articleView.html?idxno=407909