The new government of South Korea will reportedly finalize the regulatory framework on the local digital asset ecosystem next year and enforce it in 2024. The legislation will aim to incorporate cryptocurrencies like bitcoin into the country’s institutional system.
In addition, the authorities have greenlighted the Bank of Korea’s efforts to launch a CBDC in 2023.
South Korea Embracing Crypto
Just two months after Yoon Seok-youl secured a victory in South Korea’s presidential elections, his administration touched upon the cryptocurrency industry. According to a local coverage, the authorities will enact the Digital Assets Basic Act in 2023, meaning that crypto will be entirely supervised in the country.
The initiative should include bitcoin and the altcoins into the nation’s institutional system and grant domestic investors enhanced protection when dealing with the asset class.
The legislation will be based on international standards as the Korean officials vowed to partner with the Bank of International Settlements (BIS), the Financial Stability Board (FSB), as well as American and European watchdogs before officially introducing it.
The bill will also support Korean monetary organizations willing to provide cryptocurrency services. Currently, locals can open crypto accounts through the country’s leading authorized bourses – Upbit, Gopax, Bithumb, and Korbit.
“We will strengthen the link between digital asset trading accounts and banks by expanding financial institutions that provide real-time verification services for virtual asset transactions,” a government official stated.
The newly-elected ruling body touched upon CBDCs, too, as the administration will greenlight the nation’s central bank’s intention to release a digital won next year. At the beginning of 2022, the Bank of Korea announced it had completed the first stage of its CBDC testing program and is currently running its second phase.
Subsequently, the government plans to issue guidance on the employment of non-fungible tokens and ICOs.
The New President and Crypto
Yoon Seok-yuol displayed his positive stance on the digital asset sector during his presidential campaign by initially outlining plans to allow initial coin offerings (ICOs).
Later on, he promised to change the crypto taxation policies in the country, saying people should be taxed if their annual profits from such investments exceed $40,000. Currently, the taxation threshold is $2,000.
Anndy Lian – Chairman of BigONE Exchange – emphasized the leader’s approach towards making South Korea a center of the crypto industry:
“He understands the importance of crypto. He understands the future, and it is unstoppable.”
A recent study revealed that the digital asset market is an attractive niche for Koreans. The most popular cryptocurrency is bitcoin, as locals own around $5 billion worth of it (calculated at the end of April). Ripple ranked second with $4.8 billion, while investors had distributed approximately $4.5 billion into Ether.