South Korea’s financial regulator has revealed plans to introduce regulatory guidelines for digital currency exchanges operating in the country by the first quarter of 2017.

Korea Joongang Daily reported that for this purpose, a task force has been launched by the Financial Services Commission. The task force will hold regular meetings to discuss the regulatory status of digital currency, prepare licensing rules for exchanges, and formulate measures to prevent money laundering and fraud in transactions.

"The government will push for the systematization of digital currency on a full scale in tandem with a global trend in the U.S., Japan and other countries," Yim Jong-yong, chairman of the Financial Services Commission, said in a speech at the 12th Fintech Center Demo Day event (quoted by The Korea Herald).

The Ministry of Science, ICT and Future Planning currently oversees the registration of bitcoin operators in the country, but offers no financial regulatory framework. In the first meeting, the task force agreed that the sector needs to be regulated, with the commission suggesting that new rules might include strong regulations to prevent illegal use of digital currency exchanges.

“There’s still no legal definition for ‘digital currency.’ We plan to start work by coming up with a legal definition so that we can respond to issues involving tax payment, money laundering, and consumer protection,” an FSC source said, as quoted by the hankyoreh. “We may be presenting the legal definition and specific plans in the fintech development roadmap by the first quarter of next year”.

In addition, the Korean government is also planning to establish a blockchain consortium combining fintech companies and financial institutions, the hankyoreh reported.

In order to foster fintech ecosystem, the government will offer 3 trillion won ($2.65 billion) in financial support over the next three years, Yim said. According to the FSC, these measures make up the “basic direction” of the second-stage fintech development roadmap, which would be unveiled in Q1 2017.

“Where the first-stage fintech development roadmap was focused on removing irrational regulations, the second stage will be focused on redesigning current systems to make them more suited to the fintech environment,” Yim added.