By
Temitope Olatunji
April 15th, 2024
A set of bills to regulate the cryptocurrency market is being developed in South Korea.
Representative Park Yong-jin, a lawmaker and member of South Korean ruling Democratic Party, is preparing a set of bills to regulate and legalize cryptocurrencies like Bitcoin and Ethereum in the country.
Park reveals that three revisions will be ready by June to set a regulatory framework for cryptocurrencies. He aims to revise the Electronic Financial Transactions Act and to require traders, brokers, or other business entities involved in cryptocurrency transactions to get regulatory approval from the Financial Services Commission. The requirements include the retention of capital of at least 500 million won ($436,300) and data processing facilities.
If laws on income tax and corporate tax are revised as planned, financial authorities will be able to tackle tax evasion from the digital currency transactions.
Park underlines the need to address “the void of a state-led protection that guarantees digital currency’s value,” “digital currency’s nonexchangablilty to other existing currencies” and “the possibility of wreaking havoc on national economy from digital currency bubble burst.”
Park as well as the Financial Supervisory Service states that South Korean cryptocurrency trading platforms including Bithumb, Korbit and Coinone that take up 75.7 percent, 17.6 percent and 6.7 percent in the market respectively have no legal grounds for their establishment.
Implementation of state control means “removing uncertainties” and “boosting transparency,” said Kim Kyung-hwan, head attorney of law firm Minwho.
The Korean initiative comes right after Japan recognized Bitcoin as a mainstream currency. The country has passed the law that categorizes the cryptocurrency as a legal payment option within the country. The highly-anticipated law was implemented on April 1, 2017, which coincides with the beginning of a new fiscal year in many countries.
Besides, the news has just come from Japan that the country has implemented tax reform bill aimed to officially eliminate consumption tax on the sale of Bitcoin. It is highly possible that Bitcoin trading activity will rise once the bill is activated.
The whole cryptocurrency ecosystem of Japan will benefit from Bitcoin’s tax elimination bill. Recently, some of Japan’s most influential companies including its largest electronics retailer Bic Camera started to accept Bitcoin as a digital currency and a payment method.
As Bitcoin is getting more and more mainstream in Japan, hundreds of thousands of restaurants, cafes and stores are expected to start accepting Bitcoin as AirRegi, Japan’s largest point of sale machine operator, is looking to integrate Bitcoin by the fall of 2017.
Reasonable regulatory base is definitely something Bitcoin market needs right now to reach $5 trillion by 2022 as Michael Novogratz, a somewhat legendary figure, a $3.2 bln investor and former manager of the multi-billion dollar investment firm Fortress, predicted.