South Korea’s ruling People Power Party is contemplating significant changes in the country’s cryptocurrency landscape as part of its campaign pledges for the forthcoming general election in April.
Reports suggest that the party is considering lifting the ban on spot bitcoin exchange-traded funds (ETFs) and exploring avenues to allow institutional investment in cryptocurrencies, including initial exchange offerings (IEOs).
Proposed crypto reforms by South Korea’s People Power Party
The party’s proposed measures include a review of legislative frameworks to enable the approval of various cryptocurrency-related investment products, akin to those authorized in the United States.
While South Korea’s financial regulator currently upholds a ban on financial institutions launching cryptocurrency ETFs, the People Power Party is deliberating strategies to potentially overturn this restriction.
Furthermore, the party is contemplating gradually easing the ban on institutional investment in crypto, with a particular focus on prioritizing investment firms over banks and insurance companies. This cautious approach takes into consideration the necessity of safeguarding user funds, especially within the realm of traditional financial institutions.
People Power Party’s crypto outreach to youth
In line with these considerations, the People Power Party envisions establishing a “Digital Asset Promotion Committee” endowed with sufficient authority to propose legislation and enforce sanctions about digital assets.
This move underscores the party’s commitment to fostering a regulatory environment conducive to cryptocurrency innovation while ensuring adequate consumer protection.
Amidst these proposed reforms, the People Power Party appears to be strategically targeting younger demographics, particularly voters in their 20s and 30s. Cryptocurrency ownership data from the National Tax Agency indicates that over 80% of cryptocurrency holders in South Korea fall within this age bracket as of September 2023.
Recognizing the significance of this demographic in the upcoming election, the party is reportedly considering further delaying the taxation on crypto gains, potentially extending the timeline from 2025 to 2027. By aligning its promises with the interests of young voters, the People Power Party aims to secure broader support and bolster its electoral prospects.
Implications for South Korea’s crypto landscape
The potential implementation of the People Power Party’s proposed measures could have far-reaching implications for South Korea‘s cryptocurrency ecosystem. The introduction of spot bitcoin ETFs and the gradual relaxation of institutional investment restrictions may contribute to increased market liquidity and investor participation.
Moreover, the establishment of a dedicated regulatory body, such as the Digital Asset Promotion Committee, signals a proactive stance towards nurturing innovation while mitigating associated risks. By providing clarity and oversight in the digital asset space, South Korea can position itself as a conducive environment for blockchain and cryptocurrency development, fostering economic growth and technological advancement.
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