[Delio] Crypto-friendly President-elect Yoon Suk-yeol’s Promise! How will the market change?
South Korean president-elect Yoon Seok-youl gave his first speech regarding blockchain development and cryptocurrency regulations in the country.
Based on the president’s address, Delio’s CEO James delivered extensive feedback and expectations on the Virtual Talk’s Youtube channel.
The talk circled around the question ‘What are the expectations from upcoming government laws of cryptocurrency regulation?’
James has positively commented on the tax exemption for capital gains under 50 million KRW (roughly converted to $40,000) and on the allowance of token issuance and ICO (initial coin offering).
The tax applicable line was 2.5 million KRW (approximately $2,000) since 2017. The new uplifted border line means that virtual assets will be considered as a different type of traditional stocks. He says, ‘It [upcoming law] speeds up the development of digital asset market, however, the priority of the government should be to establish official regulation institutions with relevant laws. And support from those institutions will play a crucial role in technology development of the country.’
He underpinned his statement by citing the BCG (Boston Consulting Group — the world’s largest and prestigious global management consulting firm based in Boston, Massachusetts) report on digital asset management. According to the report, digital asset market must be dealt by governments as an independent business sector with separated regulations, as global M&As (merge and acquisitions) in this sector expeditiously increased by 50 times compared to the previous year. Investments in virtual financial products such as bitcoin and altcoins, show 500% growth this year.
Contrarily, the Delio CEO concerns some uncertainties of the government plans since there has not been enough research in this sector by officials. The existing law, the Act on Reporting and Use of Certain Financial Transaction Information, only refers to AML (anti-money laundering) and KYC (know your client) which was adopted in March 2021. This act is solely focused on the transaction regulations of cryptocurrency exchanges which leaves digital finance companies’ activities ambiguous. James gave an example of WeMade (a video game developer based in Seoul) which previously had problems with reporting revenues due to the contradictory sections of the law.
Another burden standing ahead of the government is the lack of blockchain specialists in South Korea. Outsourcing and training programs should be needed; however, it takes longer time than we all expect.
James concluded his talk by saying, “The upcoming law will connect virtual asset firms with banks to provide transparent transactions, and detailed research reports will be available to investors, and solid security systems will be introduced soon.”
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