Yoon Suk-yeol, the newly elected president of South Korea, had promised his constituents to implement a cryptocurrency-friendly policy. The latter, elected in March 2022 and joined since May 2022, wants to raise the tax threshold for crypto investment gains to 50 million won, or approximately $ 38,922. A measure that would allow flexible taxation of profits on cryptocurrencies. However, some dissatisfied voices increase mod Yoon Suk-yeol.
The South Korean National Assembly opposes this measure
The Research Service of the South Korean National Assembly, NARS, opposes this decision. NARS provided information and analysis on regulatory and policy issues to lawmakers. He classified cryptocurrencies in the category of virtual assets. According to this organization, the tax threshold for income generated by virtual assets would be 2.5 million won (approximately $ 1,946) at a tax rate of 20%. This tax rate would be the same as for income from financial investments. In the eyes of NARS, with currently “only” 20% taxation, cryptocurrencies are not heavily taxed. However, this is a much heavier treasure than Yoon Suk-yeol predicts …
South Korea is one of the most active countries when it comes to cryptocurrency
South Korea has no reason to be ashamed of its commitment to cryptocurrencies. The adoption of cryptocurrencies by the Korean people is even dazzling. The market reached 55.2 trillion won by the end of 2021. That’s about $ 45.9 billion! The number of cryptocurrency holders stood at almost 5.58 million on the same date. Or 10% of the country’s population, according to a survey conducted by the country’s main financial regulator. The cryptocurrency market is booming in South Korea, as evidenced by the success of NFTs.
Legislation coming soon
The new tax rules for the country are expected to enter into force in 2023. A new digital asset regulator will follow. The country’s income tax system was introduced in December 2020. President Yoon Suk-yeol also promised to support the return of IEOs (initial exchange offer), which was banned in 2017. Presidential candidates had expressed cautious support by proposing favorable tax laws and the potential return on IEOs (initial exchange offer). They had been surfing on a real craze for cryptocurrencies. The Democratic candidate, along with the Republican, had become the first politicians in the world to use NFTs as a source of funding for their campaigns. Current President Yoon Suk-yeol had even proposed laws and infrastructure for NFTs. More significantly, the President of South Korea had also proposed the introduction of a new government body to regulate digital assets.
In short, we can observe that South Korea is becoming one of the most dynamic countries in terms of activities related to cryptocurrencies. The country’s political class has understood this well. She knew how to exploit these problems. President Yoon Suk-yeol’s policy remains quite flexible and will allow for easier taxation than that proposed by NARS.
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Students who are passionate about entrepreneurship and fascinated by the technologies behind cryptos! Yes, I am convinced that the two are closely linked: blockchain and NFTs are revolutionizing many sectors and presenting unprecedented opportunities.