(Rejected 1) South Korea Recommends Integrating Cryptocurrency into The Country’s Financial System
The South Korean Presidential Committee on the 4th Industrial Revolution has recommended some vital pro-cryptocurrency measures to the government.
The Future of Crypto Remains Resilient
According to Business Korea media platform, as of 2019 May, the daily trade of cryptocurrency assets hit more than 80 trillion won (about US$69 billion) in the world. Thus, South Korean authorities feel that it’s no longer possible to stop the crypto asset trade.
The committee wants to government to integrate crypto into the nation’s financial systems, therefore allowing financial organizations to offer and handle a wide range of cryptocurrency-based products directly.
The committee suggests the need to allow financial institutions to offer their own cryptocurrency-related products like Bitcoin derivatives as a medium-and-long-term strategy for the institutionalization of cryptocurrencies.
The commission further urged the government to allow financial firms to release future products pegged on Bitcoin prices, similar to the way the U.S financial authorities did.
Apart from introducing Bitcoin derivatives in South Korea, the commission also recommended listing Bitcoin directly on the country’s exchange operator, the Korea Exchange (KRX).
Other Commission’s Recommendations
The commission also wants the government to introduce guidelines or business licenses for crypto exchanges. This is a similar initiative that financial authorities in Switzerland and the U.S oversee.
Moreover, the presidential committee proposed that participants in the traditional capital market like banks and securities should develop and offer domestic custody solutions to deal with cryptocurrency assets with the intention of the Korean crypto-asset market not to depend on foreign countries.
The commission also advised the Korean government to progressively allow institutional investors to handle cryptocurrency assets and promote OTC (over the counter) trading desks dedicated to institutional investors’ trade.
Furthermore, the commission recommended unifying crypto-related terms like virtual currencies and cryptocurrencies into crypto-assets.
The Mandate of The Commission
The commission was formed by presidential decree in 2017 to coordinate policy initiatives and recommendations concerning the development of new technologies and science in South Korea. Other functions of the commission involve deliberating on the role of new technology, organizing forums and public campaigns, and coordinating measures to support the adoption of new technology.
Before releasing the document mentioned above, the commission had advised the government to quickly develop the legal status of cryptocurrency so that to proceed with accounting and tax measures.
In October 2019, the commission revealed that the government’s current policy that focuses on curbing cryptocurrency speculation has decreased the country’s global competitiveness in crypto and blockchain areas.
Last week, the Ministry of Finance and Economy said that the legal status of cryptocurrency is required to amend the country’s tax law. The ministry clarified that until the law is amended, cryptocurrency profits are not taxable in South Korea.