A South Korean presidential committee is pushing for the government to establish legal status for cryptocurrency to stay competitive globally. So far, the government’s policies have been risk-focused to curb speculation, which the committee says must change.
Presidential Committee Pushes for Crypto Legalization
The South Korean Presidential Committee on the Fourth Industrial Revolution (PCFIR), directly under the president, has made several recommendations regarding the country’s cryptocurrency regulation. The PCFIR coordinates policies and reviews matters pertaining to the national master plans and strategies related to the “fourth industrial revolution,” which refers to a highly connected economy supported by advances in areas such as blockchain, 5G, artificial intelligence, big data, and the internet of things.
At the committee’s global policy conference in Seoul on Oct. 25, PCFIR Chairman Chang Byung-gyu said “the government needs to establish the legal status of crypto assets,” several local media outlets quoted him as saying.
Emphasizing that the country’s regulations and administrative procedures must be improved to foster innovative startups, Chang stressed:
The legal status of crypto assets should be established as soon as possible, and tax and accounting measures should be taken.
Call for Changes Under New FSC Chairman
The committee also urged the government to promote innovation and the institutionalization of crypto assets in order to stay competitive globally. However, so far, the government has opposed the idea due to concerns of possible side effects raised by the Ministry of Finance, the Ministry of Justice, and the Ministry of Information, an industry stakeholder told MSN news outlet.
The PCFIR criticized the government’s current crypto policies of focusing primarily on curbing speculation and reducing the kimchi premium, stating:
The government’s deterrence policy, which is indispensable to the cryptocurrency speculation fever, is reducing our global competitiveness in the blockchain and crypto-asset industries … We need to set policy goals to preempt future opportunities.
Led by former chairman Choi Jong-ku, South Korea’s top financial regulator, the Financial Services Commission (FSC) implemented emergency cryptocurrency measures in December 2017 in order to curb the kimchi premium. Several follow-up measures were introduced over the next few months, including the real-name system in January last year. However, only the country’s top four crypto exchanges have been able to use the system so far.
Choi is no longer the chairman of the FSC. He was succeeded by Eun Sung-soo on Sept. 9. Prior to his appointment, Eun served as the president and chairman of the Export-Import Bank of Korea and led the Korea Investment Corporation, Korea’s sovereign wealth fund, from January 2016 to September 2017.
After the PCFIR announced its crypto recommendations, Lee Kong-joo, Advisor to the President for Science and Technology, thanked the committee for its efforts, the Bchain publication detailed, quoting him as saying, “I will actively consider ways to make these [recommendations] possible.”
Furthermore, the Hankyoreh reported on Oct. 27 that the Korea Financial Intelligence Unit, under the FSC’s supervision, said that it will beef up crypto regulations in compliance with the standards set by the Financial Action Task Force (FATF). The announcement followed a recent FATF plenary meeting. The FATF issued guidance on crypto assets and related service providers in June and is currently evaluating how well its member countries are applying the guidelines.
What do you think of this South Korean presidential committee pushing for the legalization of cryptocurrency? Let us know in the comments section below.
Images courtesy of Shutterstock.
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