South Korea Financial Services Commission (FSC) has introduced new regulations for crypto lending platforms. According to the announcement , these rules aim to better protect consumers and improve transparency in the crypto market. The regulations will take effect soon as part of the country’s effort to regulate the fast-changing digital asset industry. Key Changes in Korea’s Crypto Lending Rules South Korea has issued a ban on leveraged crypto loans. This means platforms cannot offer leveraged loans anymore. To stop unfair lending practices, the FSC has set a limit on interest rates for crypto loans at 20%. This helps create a fairer lending environment for consumers. Lenders will also have limits on the types of cryptocurrencies they can use. Likewise, crypto exchanges must work with the Digital Asset eXchange Alliance (DAXA) to ensure that new borrowers complete online training and pass a suitability test. These steps help make sure that individuals understand the risks and workings of crypto lending before they take part. As crypto lending platforms become more popular, there are growing concerns about investor safety, fraud, and market manipulation. The Financial Services Commission’s new rules will balance innovation with regulation. Summarily, these rules aim to create a safer environment for both retail and institutional investors. South Korea to Introduce Stablecoin Rules Last month, the FSC announced its plans to submit a stablecoin bill to the National Assembly in October. Notably, the bill is part of the country’s second set of digital asset laws under development. The proposed legislation is similar to the U.S. GENIUS Act on stablecoin rules signed into law in June. The upcoming bill will focus on regulating the creation and maintenance of stablecoins. It will also require that every stablecoin is backed by reliable collateral to protect users from financial loss. In addition, issuers will need to put in place strong internal systems to manage risks, both financial and technical. These measures aim to establish trust in stablecoins, prevent misuse, and simultaneously foster innovation in South Korea’s digital finance sector. South Korea Issues New Crypto Investment Guidelines Similarly, South Korea’s FSC plans to issue new guidelines for crypto investment in the third quarter of this year. As reported by TheCoinRise, this move signals the country’s intention to end the de facto ban on institutional investment in digital assets. It is worth noting that South Korea is progressing towards establishing a complete regulatory framework for crypto. Its follow-up legislation is expected to be completed this year. The FSC outlined specific areas the legislation would address. The main topic includes making new crypto exchange listings more transparent. Recall that South Korea introduced its first crypto laws in July 2024 after a draft bill was approved in May 2023 . The post South Korea to Introduce New Rules for Crypto Lending appeared first on TheCoinrise.com .
