South Korea's Financial Services Commission (FSC) has revealed it is setting up a department dedicated primarily to cryptocurrencies and blockchain.

The FSC said the new department – dubbed the Financial Innovation Bureau – will focus on developing policy-making initiatives for the domestic blockchain and fintech industry, The Korea Times reported on Thursday.

An FSC official was cited as saying:

Perhaps surprisingly, though, the body will exist only temporarily, with a two-year lifespan.

The decision to set up the temporary bureau was reportedly made during a meeting of financial regulators and the Ministry of the Interior and Safety.

"The FSC plans a major organizational reshuffle to better protect financial consumers and proactively respond to financial innovation in the Fourth Industrial Revolution era," said the FSC official.

The move by the finance regulator come amid a growing effort in the country to develop new laws to regulate the blockchain industry after somewhat knee-jerk reactions in the past.

Notably, South Korea outlawed initial coin offerings last year. However, in May, the nation's legislative arm of government pushed for the removal of the ban, officially proposing legislation to permit ICOs as long as investor protections are put in place.

Earlier this month, it was also reported that members of different political parties are expected to submit bills focused on regulating cryptocurrencies, initial coin offerings and blockchain. That follows moves by regulators to tighten rules to reduce the likelihood of money laundering and improve the domestic exchange industry following a number of hacks and cases of embezzlement.

Korean won detail image via Shutterstock