The Presidential Committee on the Fourth Industrial Revolution (PCFIR) in South Korea has recommended the government to allow Bitcoin derivatives for financial institutions.
07 January, 2020 | AtoZ Markets – PCFIR recommends that the government should allow financial institutions to have the right to launch crypto-based investment products. That includes Bitcoin derivatives, as a route for the possible institutionalization of cryptocurrencies.
South Korea Calls for Institutionalisation of Bitcoin
South Korea’s Presidential Commission has proposed Bitcoin-based financial derivatives to counter the digital Yuan. The commission recommends setting up a Korean custodial service for cryptocurrencies. The commission also recommended:
“The financial sector develops and introduces a Korean custody solution to avoid depending solely on foreign depositories in the process of processing cryptographic assets. And Bitcoin should be listed directly on the Korean Stock Exchange (KRX).”
“Traditional financial market participants, such as securities companies and banks, should develop and introduce domestic preservation solutions to process crypto assets. So that the Korean crypto asset custody market does not depend on foreign countries “, said the commission.
“The Korean government must gradually allow institutional investors to process crypto assets and promote over-the-counter (OTC) offices dedicated to the trade of institutional investors.”
The committee also recommended that the Korean government should follow the example of the US and Swiss financial authorities. And it should consider introducing licenses and guidelines for cryptocurrency exchanges and the integration of cryptocurrency-related products into the financial system of the country. Because cryptocurrency interest is growing in the global cryptocurrency trade. The commission said:
“In May 2019, daily crypto-asset trade reached more than 80 trillion won (approximately $ 69 billion) worldwide. Therefore, it is no longer possible to stop trading in crypto assets “.
Crypto Tax Law in South Korea
The committee also recommended the unification of different terms such as cryptocurrencies and virtual currencies under the term “crypto-assets”. However, the South Korean government is examining international trends to include digital currency in current tax laws properly. The Ministry of Strategy and Finance said:
“We are preparing a virtual asset tax plan by thoroughly examining the taxation of major countries. We are also examining consistency with accounting standards and trends in international discussions to prevent money laundering.”
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