South Korea Supports the Creation of Bitcoin Derivative Financial Products
Financial institutions in South Korea will soon be able to launch Bitcoin derivatives and other crypto-based products as part of the country's effort to legalize cryptocurrencies. The South Korean Presidential Office's Fourth Industrial Revolution Commission released a document advising the Korean government on policies that could serve as a roadmap for institutionalizing cryptocurrencies, according to Business Korea on Monday.
The Commission suggested that Bitcoin should be listed directly on the Korean Stock Exchange (KRX) and that the government should emulate US financial authorities by encouraging commercial organizations to create cryptocurrency- based investment vehicles for institutional investors, including Bitcoin derivatives.
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They recommended that the government could start by introducing guidelines or licenses for cryptocurrency exchanges. Before integrating cryptocurrency-based products into the financial sector in the medium and long term, just like the monetary authorities of the US and Switzerland.
“As of May 2019, the daily trading of cryptoassets reached more than 80 trillion won (about 69 billion USD) worldwide, so it is no longer possible to stop the trading of cryptoassets,” the Commission said.
The Commission also believes that a Korean cryptocurrency custody solution in the financial sector would prevent the country from relying exclusively on foreign custodians for digital assets.
“Traditional capital market participants 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 does not depend on foreign countries,” the Commission added.
Taxes and levies
Last week, the South Korean Ministry of Finance and Strategy announced that local cryptocurrency traders in the country are currently not required to pay taxes on the profits they generated from trading cryptocurrencies due to the loophole in existing tax laws. .
The Ministry noted that they are currently reviewing the crypto tax laws of other countries and looking at how they will classify crypto assets as taxable income. However, for the cryptocurrency to become a taxable event. South Korea must first clear up some issues, such as giving cryptocurrencies a clear definition and legal status.
