On January 6th, 2020, Business Korea reported that the Presidential Committee for Fourth Industrial Revolution (PCFIR) advised the Korean Government to allow Korean financial institutions to launch crypto-products, including Bitcoin derivatives.
The commission suggests certain policies that the Government should introduce. These include introducing bitcoin derivatives, unifying the terms virtual currencies and cryptocurrencies into crypto assets, and listing BTC on the Korea Exchange (KRX).
PCFIR is urging this to the Government so that it can institutionalize crypto in an era that is increasingly leaning towards digital finance.
The commission stated that allowing Korean financial institutions to develop futures products that are based on the prices of Bitcoin will prevent sole reliance on foreign custody solutions such as those from the US and Switzerland.
PCFIR Urges Korea Government to Introduce Guidelines and Licenses for Crypto Products And Exchanges
THE commission’s objective is to develop a comprehensive policy direction, strategy, and action plans across ministries for preparation of the 4th industrial revolution. As such, the commission urges the Government to implement initiatives similar to those undertaken by the US and Swiss financial authorities.
The PCFIR stated that in May 2019, the daily crypto asset trade had reached a global figure of about $80 Million, which makes it impossible to stop or ignore such a trade. The Government should, therefore, encourage local financial institutions to handle crypto assets and develop their own custody solutions:
“The Korean government has to gradually allow institutions investors to deal with crypto assets and promote over the counter OTC dedicate to institutional investor trade.”
South Korean Government Addresses Crypto Taxing Issues
The news comes a week after the Ministry Of Finance And Strategy in South Korea announced that a loophole in the current tax laws make it possible for local crypto traders to avoid paying taxes:
“The income tax law is only taxable on income listed as taxable. 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.”
Currently, digital currencies have no legal status in South Korea. This is happening in a country that was named a major tech player in the world in 2018 and home to major crypto exchanges like Bitthumb and CoinOne.
Meanwhile, in neighboring North Korea, the authorities announced several months ago their plans to develop a national digital currency. The government spokesman on cryptocurrency matters Alexandro Cao de Benos said that their digital currency would be similar to bitcoin. North Korea’s interest in cryptocurrencies is seen as a way to avoid sanctions and raise capital to fund their alleged illegal nuclear programs. Last year hackers from North Korea were accused of stealing almost $2 Billion by stealing and mining cryptocurrencies.