The FSC has proposed legislative amendments that would give it power over payment settlements in the fintech industry. The BOK says this will create redundant regulations.
BOK (Bank of Korea) and the FSC (Financial Services Commission) are reportedly embroiled in a power struggle over which entity should supervise and regulate payment settlements.
The feud is said to have started when the FSC proposed amendments to the Electronic Financial Transactions Act which would grant it authority to give licenses, demand documents and supervise payment settlements in the fintech industry.
The BOK argues that the central bank is the only authority mandated to regulate and supervise payment settlement systems, as is the case in the US, Switzerland and the UK.
Local media outlets have learned that the BOK and FSC have been jostling over the matter since March, and that a series of negotiations have since been held.
The FSC is said to have already submitted its revisions to the Electronic Financial Transactions Act to lawmaker Youn Kwan-suk, who chairs the parliamentary National Policy Committee.
The BOK fears that the FSC’s intervention will end up creating redundant regulations and that the two authorities will come into conflict if the revisions are passed.
“We shall hold further discussions with the BOK in the upcoming legislation processes,” FSC director general of the financial innovation bureau Lee Hyoung-joo said.
An unidentified BOK official said the central bank has insisted that its authority be protected, like other central banks in developed countries, but “the FSC appears to be ignoring our request and pushing ahead with its initial plan.”