South Korea commission admits crypto trading ‘unstoppable’

South Korea commission admits crypto trading 'unstoppable'

Acknowledging that the trading of cryptocurrencies is here to stay, an advisory body of the South Korean government is recommending that financial institutions be allowed to offer crypto derivatives.

On Monday, South Korea’s Presidential Committee on the Fourth Industrial Revolution (PCFIR) released a report wherein it recommended that the government take steps to incorporate cryptocurrency into mainstream finance.

“As of May 2019, daily crypto-asset trade hit more than 80 trillion won (about US$69 billion) in the world, so it is no longer possible to stop crypto-asset trade.”

Specifically, it suggested that financial institutions be allowed to offer cryptocurrency-related products.

The commission also recommended that financial institutions be allowed to directly handle crypto assets and develop custody solutions and that Bitcoin should be listed on Korea Exchange (KRX).

“Participants in the traditional capital market such as securities firms and banks should develop and introduce domestic custody solutions to handle crypto assets so that the Korean crypto-asset custody market will not depend on foreign countries.”

South Korea should follow United States

The advisory board noted that South Korea could take US regulators as an example, and sanction some products tied to Bitcoin, such as futures contracts to limit the investment risks for the citizens.

In its report to the government, the committee said:

“The Korean government has to gradually allow institutional investors to deal in crypto-assets and promote over-the-counter (OTC) desks dedicated to institutional investors’ trade.”

South Korea’s interest in cryptocurrency on the rise

The commission’s report is just the latest example of South Korea’s growing interest in the crypto and blockchain space.

Last year, the Ministry of Strategy and Finance (MOSF) added blockchain to the list of sectors that are eligible for the country’s research and development tax credit.

The addition means that 20 to 40 percent of blockchain companies’ R&D expenses are now tax deductible.

And earlier this week, MOSF announced that individual investors’ crypto trading profits are not taxable under current law.

“Profits from individual virtual asset transactions are not listed income and are not taxable,” a spokesperson for ministry explained.

The tax exemption is only for the time being, however, as MOSF has said that they are working on incorporating cryptocurrency into South Korea’s tax laws:

“We’re preparing a taxation plan for virtual assets by comprehensively reviewing the taxation of major countries, consistency with accounting standards, and trends in international discussions to prevent money laundering.”

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