South Korea's People Power Party Suspends Plans to Ease Cryptocurrency Regulations
Summary:
South Korea's dominant People Power Party has suspended its plan to ease cryptocurrency regulations, with difficulties in aligning with government and financial authorities on such policies being cited as a possible reason. Despite previously considering allowing domestic institutions to introduce spot Bitcoin exchange-traded funds (ETFs) and directly invest in cryptocurrencies, the proposal was dropped from the political party's policy plans. Meanwhile, the nation's leading financial watchdog and the Financial Services Commission continue to express concerns about the investment risks associated with virtual assets. The People Power Party had also considered postponing tax on virtual assets for two years and allowing companies to invest in these assets, but the idea was not finalised due to inadequate consultation with relevant ministries and fears of sizable losses.
South Korea's dominant People Power Party has suspended its bid to relax cryptocurrency regulations, including lifting the prohibition on domestic Bitcoin (BTC) spot exchange-traded funds (ETFs), say local informants. A report by Chosun Biz, a local news outlet, suggests that the party's broken promises could be due to difficulties in reaching an agreement with the government and financial regulators on cryptocurrency policies. Earlier reports suggested that the ruling party was considering delaying tax on cryptocurrency earnings and allowing domestic institutions to introduce spot Bitcoin ETFs and make direct investments in cryptocurrencies. Conversely, the party led by Representative Yoon Chang-hyun, removed virtual assets from its policy plans after postponing last week's virtual asset pledge indefinitely. Hong Ik-pyo, leader of the Democratic Party, announced a pledge to institutionalize digital assets in Seoul's National Assembly, Yeouido. In January, the nation's leading financial watchdog reiterated its ban on financial institutions launching cryptocurrency ETFs, arguing that virtual assets do not match the capital assets identified in the Capital Markets Act. Local investors currently face limitations on investing in spot crypto ETFs, even though foreign crypto futures products are still available. Even though the US Securities and Exchange Commission (SEC) recently authorised the spot Bitcoin ETF, South Korea's Financial Services Commission continues to raise concerns over the perceived investment risks linked to virtual assets. On the other hand, the opposing Democratic Party recently made its crypto campaign promises, after reportedly making similar promises about crypto ETFs. The general election in South Korea is slated for April 10. The report says that the People Power Party had considered a proposal to postpone tax on virtual assets for two years and allow companies to invest in virtual assets. However, this proposal was not included in the party's pledges due to insufficient consultation with relevant ministries and fears of significant losses, particularly regarding corporate investments in virtual assets. The Financial Supervisory Service (FSS) in South Korea, the leading financial regulator, plans to consult the US Securities and Exchange Commission about spot Bitcoin exchange-traded funds. FSS chief Lee Bok-Hyun unveiled a business plan for 2024, which includes scheduled visits to important financial markets like New York in Q2. The discussion agenda continues to focus on the South Korean financial market and spot Bitcoin ETFs.
Published At
2/29/2024 10:22:40 AM
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