Yoon Suk-yel, the President of South Korea, is determined to keep the country’s status as a hub for innovation. South Korea plans to implement comprehensive crypto legislation by 2023 and to institutionalize the sector by 2024.
Kukmin, South Korean newspaper, reported Wednesday that the administration plans to introduce the Digital Asset Basic Act, (DABA), in the coming year, and then to add more legislation by 2024. This bill is one of the 110 policy goals that the new president has introduced earlier in the year.
The bill will be drafted according to international norms. It will draw on the experience of world’s largest economies. As the local Financial Stability Board will collaborate with the Basel-based Bank for International Settlements, and United States and European Union regulators.
Although there aren’t many details, the outlook for the industry is positive. The government intends to improve the infrastructure for crypto-fiat transactions to allow more banks to set up their own platforms for fiat/crypto exchange. Only four banks have this capability in South Korea at the moment. The South Korean authorities plan to establish nonfungible tokens and a regulatory framework for initial coin offerings.
A central bank digital currency (CBDC), is also being considered. In January 2022, the Bank of Korea concluded its first phase of mock testing.
Already, the Yoon administration confirmed the authenticity of the leaked document. However, it noted that the draft was not the final.
Yoon Suk-yeol declared on May 3 that he would advocate for deferring taxation of crypto investment gains until the Digital Asset Basic Act, which will be enacted at least until 2024, is passed. The new crypto taxation rules will see the government levy 20% tax on crypto gains exceeding $2,100 annually.