The South Korean Presidential Office’s 4th Industrial Revolution Commission has recommended that the Korean government should allow financial institutions to have the right to launch cryptocurrency-based investment products, including Bitcoin derivatives, as a pathway for the eventual institutionalization of cryptocurrencies.
According to a report by Business Korea, the commission also recommended that “the financial sector develop and introduce a Korean custody solution to avoid relying solely on foreign custodians in the process of handling crypto assets,” and that Bitcoin should be listed directly on the 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,” the commission explained.
“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.”
”It is no longer possible to stop crypto-asset trade.”
The commission also recommended that the Korean government should follow in the footsteps of the United States and Swiss financial authorities and consider introducing licensure and guidelines for cryptocurrency exchanges and for integrating cryptocurrency-related products into the country’s financial system because of increasing global interest in crypto trading.
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“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,” the commission said.
The commission also recommended the unification of different terms such as cryptocurrencies and virtual currencies under the term “crypto assets.”
South Korea won’t tax crypto trading profits–for now
Late last week, Finance Magnates reported that the South Korean government has decided not to impose a tax on earnings from digital asset trading to ease the confusion of crypto taxation in the country.
However, the South Korean government is reviewing international trends to properly include digital currency in the current tax laws.
“We are 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,” stated the South Korean Ministry of Finance and Strategy in an official announcement.