Op-Ed: South Korea’s new president aims to take crypto to the next level

Op-Ed: South Korea’s new president aims to take crypto to the next level
Plans including raising the crypto tax threshold and legalizing ICOs are welcome, but will they give South Korea the shakeup it needs?
President Yoon Suk-Yeol plans to raise the current crypto tax threshold from around $2,000 to approximately $40,000. The current president Moon Jae-in lost the opportunity to take the country forward with a more positive crypto policy, in a country where last year Koreans invested over $43 billion in crypto assets in 2021.In April 2021 younger investors filed a number of petitions for example complaining how crypto assets were being taxed at a less favorable rate than stocks. Now this victory means that their voice is being heard, which I believe is great news, not just for the crypto industry, but for this new generation of investors. But at the same time, as someone involved in the Korean market since 2017 while I welcome the reports coming out of Yoon’s Presidential Transition Committee, I also know what matters is what happens after the new president takes office on May 10.

There is a risk the new government decides to allow investing in ICOs, IEOs, and STOs only to those above a certain income, to accredited investors. Certainly, the news of a new Basic Digital Asset Law, to enable the recovery of funds lost from illegal trades and scams is very welcome. But at the same time, a balance has to be struck, so the younger generation of investors in their 20s and 30s, who consist of around 36% of the market, feel they have a stake in the new system.

I also note that play-to-earn games are still illegal with no plans to change that. So, it’s somewhat ironic that the recent $620 million hack of Axie Infinity was reportedly carried out under the auspices of the North Korean government. While South Korea and the US are therefore looking to work more closely on cybercrime, there is a risk that the US will also seek to put pressure on the South Koreans to take a more highly regulated approach to crypto more in line with emerging US policy.

Will the prospect of a growing NFT market bear fruit?

What I do expect is for the market in NFTs in South Korea to grow in the future. And I think this presents a window of opportunity for the new government to take a positive approach. While the Financial Services Commission (FSC) is reportedly working to introduce NFT rules, this is yet to happen. Another potential source of frustration within the investor community is the complexity of using exchanges with different travel rule systems.

Among the big four exchanges Upbit, Bithumb, Coinone, and Korbit (with over 95% of the crypto market share), there are two travel rule systems. Upbit with the lion’s share of the exchange market has adopted its home-grown Verify VASP program, while the remainder follows another system. So, it’s perhaps good to know that Yoon’s Presidential Transition Committee is also “looking to grant more cash-to-crypto licenses to crypto trading platforms in efforts to dilute the local crypto exchanges oligopoly”.

Another overlapping issue is the dominance of the Upbit exchange in the South Korean crypto market. What’s interesting to me is seeing the concerted move by local banks to enter the crypto market. Part of the banks’ motivation to approach the incoming government is down to the fact that Upbit has over 80% of the market share.

This is underlined by the fact that Dunamu, operator of Upbit, posted a net income of 2.2 trillion won (around $1.8 billion) last year, with the figure growing 46-fold on-year. The news reportedly “shocked onlookers, as it drew near Woori Financial Group, a major banking group here. Woori posted a net income of nearly 2.6 trillion won in the same period”, according to the Korea Herald.

Banks fight for a slice of the crypto pie

Allowing banks to take apart on a more equal footing with exchanges certainly marks a step forward with potential implications for competition in regional crypto markets as well as internationally. Certainly, in Singapore, we have seen a tightening of regulations since the ICO boom years of 2017/18 which attracted so many crypto startups.

This stricter regulation has prompted startups to leave for the likes of more crypto-friendly Dubai, including global exchange Binance which recently withdrew an application to register in Singapore, instead setting up an office in the UAE.

The economic risks of not moving fast enough are also shown in the UK, where despite government plans for crypto growth there’s been significant criticism of its regulator, the FCA, for being too slow in processing crypto license applications to allow crypto startups to operate.

So, while I believe South Korea is likely to try to be more open, it’s going to be a tricky path to walk to keep all the different segments onboard, from crypto industry stakeholders to expectant younger investors. The ‘proof is in the pudding’ as they say, because while the incoming government might talk about plans to legalize ICOs it may in the fine print only be available to people who have say $1 million in assets.

However, on a more optimistic note, I do agree with crypto commentators such as Anthony Pompliano that South Korea’s crypto plans are potentially a significant step on the world stage. Yoon Suk-yeol is the first head of state from a major economy that says it plans to take crypto really seriously, including protecting the public; however, it’s also worth noting that outlined plans to set up a dedicated government agency for crypto and NFTs did not make it into the final copy of his campaign pledges.

Speaking recently in Korea on the same platform with a member of the People’s Power Party, I said that crypto and blockchain was the future. We now have to wait and see how well that promise and potential is delivered.

 

Original Source: https://cryptoslate.com/op-ed-south-koreas-new-president-aims-to-take-crypto-to-the-next-level/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Nikkei Asia: South Korea’s incoming president vows big cryptocurrency push

Nikkei Asia: South Korea’s incoming president vows big cryptocurrency push

SEOUL/SINGAPORE — South Korean President-elect Yoon Suk-yeol will take office in May with no business experience but strong ideas on one of the most contentious subjects in finance, cryptocurrencies.

Yoon, a former top prosecutor who emerged victorious last week in the closest vote for the top office in the country’s history, has promised to allow initial coin offerings, or ICOs, as part of his broader cryptocurrency pledges.

A member of the conservative People Power Party, he has also vowed not to impose taxes on cryptocurrency trading gains of up to 50 million won ($40,000), treating them the same as stock winnings.

Yoon’s proposals were welcomed by cryptocurrency advocates who expect obstacles to be removed and the door opened to increased opportunities in blockchain technology-based assets.

“We definitely welcome his stance as he is confident about boosting the industry,” said Yoon Seong-han, secretary-general at Korea Blockchain Association, a lobby group for cryptocurrency exchanges and other market participants. “As ICOs are banned now, we have no choice but to issue coins in Singapore and other countries. Ventures and startups will be able to raise money easily from investors [if the ban is lifted].”

Yoon the lobbyist is not related to the president-elect.

Singapore-based Anndy Lian, chairman of Netherlands-registered crypto trading platform BigONE Exchange, also welcomed Yoon’s stance. “He understands the importance of crypto,” Lian told Nikkei Asia. “He understands the future, and it is unstoppable.”

Stocks related to coins have rallied on Yoon’s victory over Lee Jae-myung of the center-left Democratic Party. Lee took a cautious stance toward cryptocurrencies. Lee agreed with Yoon on allowing coin issuances but was negative on treating cryptocurrencies the same as stocks.

Cryptocurrencies, which can and do go on huge price swings, have prompted concerns over how they can be effectively regulated.

Shares of Vidente, a telecom facility maker that owns a 34.2% stake in South Korea’s biggest cryptocurrency exchange Bithumb Holdings, jumped 11.3% over two days last week after Yoon was elected, before falling 5.37% on Monday and 2.39% on Tuesday.

According to South Korea’s financial regulator, the country’s cryptocurrency market reached 55.2 trillion won as of December, with average daily trading of 11.3 trillion won. More than 15.2 million people in the country have accounts with 24 cryptocurrency brokers. Of those registered, 5.6 million actually trade.

Traders in their 30s appear to be most enthusiastic, accounting for 31% of all buyers; followed by those in their 40s, at 27%; and those in their 20s, at 23%; according to a Financial Services Commission report released last month. By gender, two-thirds of users are men. More than half of users had cryptocurrencies valued at 1 million won or less, while 15% held 10 million won worth or more.

Stocks have traditionally been South Koreans’ favored investment vehicle. The country’s benchmark Kospi index in 2021 experienced a record year for initial public offerings, which totaled 17.2 trillion won. The index rose 3.63% last year and had a market capitalization of 2.2 quadrillion won.

Yoon’s electoral victory of less than a percentage point was largely propelled by support from socially and economically disaffected younger men, analysts say. This disaffection has been increasing due to high inflation, low growth and more recently soaring home prices.

The victor’s embrace of cryptocurrencies also comes as U.S. President Joe Biden last week signed an executive order ensuring responsible development of cryptocurrencies and other digital assets.

“We must reinforce United States leadership in the global financial system and in technological and economic competitiveness, including through the responsible development of payment innovations and digital assets,” the White House said in a statement, describing one of the order’s objectives.

Yoon can implement part of his cryptocurrency policy through presidential orders, but his no-tax vow will need the National Assembly to revise a tax law. The legislature will also need to pass a bill to set up an agency to regulate digital assets.

This will require cooperation from incumbent President Moon Jae-in’s dominant Democratic Party, which has a majority of 300 seats in the legislature.

At least some of what Yoon proposes is likely to be achieved, according to Han Dae-hoon, an analyst at SK Securities.

“I expect Yoon’s policy to nurture cryptocurrencies is likely to be realized with the new government,” Han wrote in a note on Monday. “But we will not know until we see it.”

In Singapore, Yoon’s openness to crypto has been met with some skepticism. Although the city-state has positioned itself as an Asian hub for digital assets, its financial regulator has been selective in offering operating licenses to crypto players; only a handful of companies have been allowed to do business in the country.

Anson Zeall — emeritus-chair of the Association of Cryptocurrency and Blockchain Enterprises and startups Singapore, a lobby outfit for over 400 businesses — said it remains to be seen how many of Yoon’s promises will be fulfilled.

“Action speaks louder than words,” he told Nikkei Asia. “We need to see what they [South Korea] come up with.”

Lian of BigONE Exchange voiced a similar sentiment.

“Singapore’s menu still has its advantages,” he told Nikkei. “[South] Korea’s money control[s] needs to be relooked [at] in order for crypto to move up another level, so Singapore is still in an advantageous position.”

 

Original Source: https://asia.nikkei.com/Spotlight/Cryptocurrencies/South-Korea-s-incoming-president-vows-big-cryptocurrency-push

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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This Is How South Korea’s Incoming President Aims to Turn the Country Into Crypto Hub

This Is How South Korea’s Incoming President Aims to Turn the Country Into Crypto Hub

Yoon Suk-yeol – South Korea’s new president – promised he will allow initial coin offerings (ICOs) and impose friendly crypto taxation rules.

South Korea’s newly elected president – Yoon Suk-yeol – displayed a pro-crypto stance during his campaign. Among his ideas is increasing the minimum threshold for paying capital gains tax on profits from digital asset investments.

Crypto Community Welcomes the New President

Last week’s presidential election in South Korea was the most contested in the East Asian country’s history. The candidate of the Conservative party – Yoon Suk-yeol – collected only 263,000 votes more than his opponent – the Democratic Party’s Lee Jae-myung. The winner, who will officially step into office in May, labeled his win a “victory of the great South Korean people.”

During his campaign, Yoon showed he is a keen supporter of the cryptocurrency industry numerous times. Initially, he promised to allow initial coin offerings (ICOs). In another appearance, the former prosecutor said that those who generate profits of less than $40,000 per year from crypto trading will be exempt from paying taxes. Currently, such taxes are imposed on profits generated above $2,000 per annum.

Korea Blockchain Association – a lobby group for digital asset exchanges – predicted that the new president will positively impact the local cryptocurrency ecosystem. Speaking on the matter was Secretary-General Yoon Seong-han:

“We definitely welcome his stance as he is confident about boosting the industry. As ICOs are banned now, we have no choice but to issue coins in Singapore and other countries. Ventures and startups will be able to raise money easily from investors [if the ban is lifted].”

Anndy Lian – Chairman of BigONE Exchange – welcomed Yoon’s viewpoint, too: “He understands the importance of crypto. He understands the future, and it is unstoppable.”

It is worth noting that private digital assets are highly popular among South Koreans, as the most enthusiastic demographic group are those in their 30s. A recent study revealed that around 15% of local crypto holders had allocated more than $8,000 each in the asset class.

It Is Time for South Korea to Embrace Crypto

Not long ago, Sohn Byung-doo – CEO of Korea Exchange (KRX) – argued that the country needs to study and explore ways to embrace the cryptocurrency sector.

The exec outlined there are around five million local investors, while the daily market trading volume is about $12 billion. If the nation does not engage further with the asset class, it could fall behind other countries that have already opened their arms to it:

“Now is the time for exchanges to compete directly with overseas exchanges.”

Featured Image Courtesy of NPR

 

Original Source: https://cryptopotato.com/this-is-how-south-koreas-incoming-president-aims-to-turn-the-country-into-crypto-hub/

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j