It’s Time for South Korea to Embrace Cryptocurrencies, Says KRX Chief

At the stage of the 2021 Global ETP Conference, Sohn Byung-doo stated that the digital asset industry is not very different from capital markets. The exec emphasized the need for investor protection and transaction stability support.

The KRX Chief Wants To Study Crypto

So far, Bitcoin and cryptocurrencies remain outside the domestic regulatory scope that covers the traditional financial sector.

On that note, Byung-doo highlighted the growing number of crypto investors in South Korea, estimated to be around 5 million, as well as the rapidly increasing daily trade volume in the country’s crypto market, which is right behind the stock market.

To put things into perspective, the Korean crypto-asset daily market trading volume is around $12 billion, while that of Korea’s composite index, KOSPI, is a little over $16 billion.

While stating that the country needs to study and explore ways to embrace the burgeoning industry, the former regulator also urged for the implementation of proper regulation that will aid in institutionalizing the asset class. Sohn added,

“Now is the time for exchanges to compete directly with overseas exchanges.”

Delay in South Korea’s Crypto Tax

Earlier this week, South Korea’s finance ministry announced its decision to delay plans of taxing cryptocurrency profits for some time. According to an amendment approved by the South Korean National Assembly’s finance committee, the crypto tax law, which was slated to come into action from 1st January 2022, has been pushed for a year.

The initial announcement around taxing crypto profits sparked massive debates and backlash for cryptocurrency investors across the country. It proposed to levy a 20% tax on digital asset gains over the amount of $2,100. As a result, many crypto investors swarmed South Korea’s Cheongwadae or the Blue House website with petitions condemning the tax plan.

There were two major reasons for the outrage. Firstly, such investors were being taxed way more than the stock market players. The latter’s threshold for taxing capital gains stands at around $42,000. Secondly, there is no such regulatory framework with protective measures for cryptocurrency investors as yet. Hence, taxation was deemed unreasonable by many.

More recently, the country’s Financial Services Commission (FSC) called the National Assembly to implement criminal liability to unfair practices such as price manipulation and insider trading in the cryptocurrency market.

Featured Image Courtesy of PulseKoreaNews