For a large part of the last decade, cryptocurrency has sparked a large transformation in cross-border payments with the ability to easily transfer money using bitcoin or ether. Both of these cryptoassets provide people the opportunity to be their own bank without having the need for a bank account. 2019 marked a year where the crypto ecosystem has witnessed a large uptick in companies interested in serving the unbanked as well. Mobile crypto wallets are helping individuals set up an account to easily hold and transfer assets or pay remittances.
Today in Korea, the 4th Industrial Revolution Commission under the Presidential Office suggested that the government allow financial institutions to launch cryptocurrency-related products, such as Bitcoin derivatives, as a medium- and long-term strategy for the institutionalization of cryptocurrencies.
As digital finance is emerging as a major keyword for both the financial sector and the blockchain and cryptocurrency industry, the commission advised the Korean government to allow financial companies to release futures products based on Bitcoin prices, as the U.S. financial authorities did. In addition, the commission recommended that the financial sector develop and introduce a Korean custody solution to avoid relying solely on foreign custodians in the process of handling crypto assets.
The Commission also suggested unification of different terms such as cryptocurrencies and virtual currencies into crypto assets, listing of Bitcoin directly on Korea Exchange (KRX), and launching Bitcoin derivatives. It also recommended that the Korean government should follow in the footsteps of the United States and Swiss financial authorities and consider introducing licensure and guidelines for cryptocurrency exchanges and for integrating cryptocurrency-related products into the country’s financial system because of increasing global interest in crypto trading.
“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,” said the committee.
Korea has been taking an increasing interest in the cryptocurrency space. The country’s government recently said that it wants to start taxing residents’ cryptocurrency-related profits. Last week, Korea’s taxation authority levied withholding tax of ~$69.5 million on Bithumb, South Korea’s largest cryptocurrency exchange.