Proposal to enact the 'Framework Act on the Promotion of the Blockchain Industry' for the advancement of blockchain

For the first time in the country, a blockchain-related bill has been proposed.

The Korea Blockchain Industry Promotion Association held a grand forum with the Korea International Trade Association to promote the blockchain industry and proposed the enactment of the 'Framework Act on the Promotion of the Blockchain Industry'.

Representative Hong Eui-rak, who is preparing to propose the Framework Act on the Promotion of the Blockchain Industry, said, “Although blockchain is a core foundational technology of the Fourth Industrial Revolution, the government’s bifurcated policy direction is causing confusion,” adding, “Instead of avoiding the short-term crisis, we must concentrate resources on infrastructure and foster it as a new growth engine.”

The Framework Act on the Promotion of the Blockchain Industry stipulates matters concerning the development of the industry and the promotion of the use of technology. It also defines blockchain as a technology that can be utilized in various fields, such as contracts, authentication, notarization, electronic voting, and distributed storage of personal information, based on concepts such as smart contracts and DAOs, as well as funding using virtual currency.

In addition, the non-financial sector and the financial sector were distinguished. It is stipulated that the Minister of Science and ICT shall be the competent authority for the non-financial sector, and the Chairman of the Financial Services Commission shall be the competent authority for the financial sector. It includes provisions to establish a Blockchain Industry Strategy Committee composed of about 20 members to deliberate and decide on related policies and to monitor and evaluate implementation progress.

Attorney Koo Tae-eon of Tech & Law pointed out, “Looking at the Promotion Act, digital tokens are given significance as a legal basis, but the level of recognition seems insufficient.” He added, “It is necessary to resolve the relationship with other laws while positively allowing specific systems for issuance and distribution. With only confirmatory provisions, authority is reserved to the executive branch based on legal interpretation, leaving room for disputes.”

Kim Tae-won, CEO of Glosper, argued that expediency must be added to the bill. He stated, “Discussions on the blockchain bill have been delayed due to regulations on cryptocurrencies. To secure global technological competitiveness through blockchain, we must act swiftly.” He added, “The bill contains many items for review, but there is no deadline for the review. Under these circumstances, startups end up waiting indefinitely despite possessing the technology. Expediency must be considered when the bill is proposed.”

Lee Jae-hyung, a division head at the Ministry of Science and ICT, explained, “Since blockchain is a new technology, there are regulations that hinder the spread of its products and services in the market. However, compared to other general industrial promotion sectors, it is still necessary to review whether it is desirable to handle blockchain technology through separate legislation or to treat it with other technologies through comprehensive legislation.”

Following this, Joo Hong-min, a section chief at the Financial Services Commission, was also skeptical about the government taking the lead in handling blockchain technology legislation. He expressed the view that the division into non-financial and financial sectors is also a dichotomy.

Attorney Kim Kyung-hwan of Minhu Law Firm, who was in charge of drafting the bill, explained, “There is still no law regarding big data. This is because there are controversial aspects and social consensus is required. The Framework Act on the Promotion of the Blockchain Industry also took reality into account. Currently, it is impossible to open an account if the terms ‘blockchain’ or ‘cryptocurrency’ are included. I believe the Framework Act can resolve these issues.” He added, “Regarding digital tokens, I saw that standardized laws could be a stumbling block. Since it is impossible to predict what kind of tokens will emerge, we tried to include them comprehensively. The Promotion Act is almost identical to global standards. We focused on passing the bill, believing that including too many new elements would only exacerbate controversy.” He concluded by stating that once enacted, amending it would not be difficult.