The South Korean government has been advised by the Presidential Committee on the Fourth Industrial Revolution (PCFIR) to permit financial organizations to roll out financial products with cryptos as their underlying asset.
Business Korea, a domestic English news outlet, has reported that the committee, as portion of a plan to institutionalize cryptos, has recommended creation of products such as Bitcoin (BTC) derivatives.
The PCFIR also advocated developing of domestic financial industry and launch of a Korean custody facility to stop depending on overseas custodians while dealing in cryptocurrencies.
The committee also recommended listing Bitcoin on the Korean stock Exchange, located at Busan. It is South Korea’s exclusive securities operator.
The committee also suggested the government to look at the option of offering business licenses or rules for cryptocurrency exchanges and integrate crypto related product offerings with traditional financial system in the medium to long-term. The committee reportedly stated:
“As of May 2019, daily crypto-asset trade hit more than 80 trillion won (over $68 billion) in the world, so it is no longer possible to stop crypto-asset trade. […] 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.”
PCFIR, established by presidential ruling in 2017, works together with the government in policy creation and offers suggestions for science and technological innovation in South Korea.
The committee sets up forums and contemplates on the functions of new technology along with the organization of public movements on the initiatives to back the adoption of latest technology.
While South Korean lawmakers have requested the government to give a detailed framework and infrastructure for cryptocurrencies, some shortcomings are still there. For instance, under the prevailing law, South Korean government cannot ask individuals to pay income tax on the profits earned through cryptocurrency transactions.
Despite the lack of adequate rules, the South Korean tax department slapped a $68.90 million (80 billion won) tax on popular cryptocurrency exchange Bithumb. The exchange is studying the possibility of filing a case to avoid the bill.
