Some South Korean experts are worried that taxing cryptocurrency earnings could throttle the local cryptocurrency industry.
The Ministry of Finance’s reformed tax system, to be unveiled in July, will tax digital assets such as cryptocurrency, though the details have yet to be released.
Economists warn this could cause problems for an industry still in its infancy.
From the Korea Times:
“It is premature for the government to impose cryptocurrency taxes at a time when the market has not developed enough in a stable manner,” Yonsei University economist Sung Tae-yoon said. From an economic viewpoint, he said, cryptocurrencies cannot be considered a universal asset like traditional paper currencies.
He also raised worries that any tough regulations or taxation schemes may block growth in the overall digital currency market.
“The financial authorities should think twice before imposing taxes on the market, as the digital currency industry is still in its infancy,” he said. “Any rash taxation or introduction of regulations can be a stumbling block for sustainable growth of the industry.”
That argument might fall of deaf ears, especially as South Korean financial officials scramble to find ways to pay for the nation’s expansionary budgets to cope with the COVID-19 pandemic.
Moreover, even if taxes may slow short-term growth, taxations and regulations are critical to preventing potentially disastrous financial crises.
“A fiasco involving commercial banks’ mis-selling of derivative-linked funds last year clearly showed how important regulations are in the financial industry,” Korea University economist Kim Jin-ill told the Korean Times. “To prevent the recurrence of such financial accidents, the government needs to introduce more careful regulations on the emerging digital currency market.”
Also in the Korea blockchain space…
(By Tim Alper, Cryptonews, June 26)
The massive Hyundai business group is reportedly on the verge of releasing cryptocurrency-related services. “Although the company is yet to reveal any details about its exact intentions, Chosun believes that Hyundai may intend to launch a comprehensive blockchain ecosystem of partners to rival the likes of Kakao and its Klaytn network, linking dapps to an e-pay platform,” writes Cryptonews, “The company appears keen to expand on its existing Hyundai Pay e-pay operations, and confirmed that it may soon look to make use of ‘POS ’ technology and “blockchain-based crypto-assets.”
(By David Abel, Coingeek, June 28)
We’ve talked about it before, but now you can read about it in CoinGeek – KT and LG U+’s Pass is South Korea’s first nationwide system for verifying digital driver’s licenses. “The mobile application was used to identify persons at select convenience store chains in South Korea to prevent the sale of alcohol and tobacco to minors,” writes CoinGeek. “Barcodes provided by buyers can be scanned by store employees using the Pass app to verify the age of buyers.”
(Written by Dalmas Ngetich, BTCManager, June 25)
BTCManager looks a bit more at the South Korean government’s plan to develop blockchain-powered online voting. “Integral to the online voting and election system is the Digital Identity (DID) service,” it writes. “This service enables citizens to conveniently manage their personal information while preventing duplication of data by institutions. Notably, the system diverges away from the highly fragmented, insecure, and exclusive traditional identity systems that have been a source of controversy.”
(Written by Jose Rodriguez, iHODL, June 24)
Major South Korean cryptocurrency exchange Bithumb is going public, with Samsung Securities tasked with organizing its IPO. According to iHODL, experts believe the move will boost crypto adoption in the country.
