Kim So-young, vice chairman of the Financial Services Commission, speaks during a press briefing, announcing the results of the third meeting of the virtual asset committee at the Government Complex Seoul, Thursday. Yonhap

Nonprofit corporations such as social welfare corporations and universities will be allowed to open accounts for virtual assets in the second quarter, the country's financial regulator said Thursday.

From the latter half of the year, accounts for trading virtual assets for investment and financial purposes will also be pilot-tested for certain institutional investors.

However, it is expected that it will take more time before the scope is expanded to general corporations and financial companies.

These are the outcomes of the third meeting of the virtual asset committee under the Financial Services Commission (FSC).

To trade on domestic cryptocurrency exchanges that support transactions in the Korean won, investors must have real-name accounts issued by banks partnered with the exchanges.

While individuals can easily open accounts for trading, banks have blocked the issuance of corporate accounts, citing the financial authorities' anti-money laundering guidelines.

Allowing corporate virtual asset accounts has been one of the industry's long-standing demands, as it would open up various business opportunities, such as making payments with virtual assets or investing in new ventures.

The 15-member committee chaired by FSC Vice Chairman Kim So-young said that the regulator will allow nonprofit corporations to open accounts starting in April at the earliest, provided they ensure operational transparency and are supervised by relevant authorities.

However, only sales for the purpose of liquidation will be permitted. For example, universities will only be allowed to sell donated or sponsored virtual assets to convert them into cash.

In the second half of the year, the FSC will select institutional investors with risk-bearing capacity and pilot the issuance of trading accounts for investment and financial purposes.

The program will target approximately 3,500 entities, including listed companies and corporations registered as professional investors under the Capital Markets Act, excluding financial institutions.

“Professional investors are already allowed to invest in derivatives, which carry the highest levels of risk and volatility. Additionally, these corporations have significant demand for blockchain-related businesses and investments, which were key factors in determining the pilot program's scope,” Kim said.

The prices of Bitcoin and Ethereum are displayed on a screen at the Upbit Lounge in Seoul, Dec. 11. Yonhap

In response to the participation of corporations in the virtual asset market, the FSC plans to strengthen measures, including enhancing banks' verification of transaction purposes and sources of funds to prevent money laundering.

The regulator, however, remains cautious regarding general corporations and financial companies.

“Rather than allowing financial companies to trade virtual assets directly, we are considering various policy measures in response to the growing discussions on tokenization of financial assets and the use of blockchain infrastructure,” Kim said.

The virtual asset industry welcomed the opening of the door to corporate virtual asset investment.

“We will cooperate to ensure the successful implementation of the corporate account road map announced by the government and will make greater efforts to protect investors,” a Dunamu official said. Dunamu operates Upbit, the largest virtual asset exchange in Korea.