South Korean political parties make crypto-related election promises ahead of national polls

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20th February 2024 – (Hong Kong) Ahead of the national elections scheduled for April 10, South Korea’s ruling and opposition parties are making promises related to cryptocurrency. The ruling People Power Party has outlined several election pledges, as reported by local sources. They are exploring possibilities to allow spot Bitcoin (BTC) exchange-traded funds (ETFs), proposing the establishment of a “digital asset promotion committee” to propose laws and enforce sanctions. Additionally, they have committed to prioritising a regulatory framework before implementing taxation on crypto gains, effectively delaying the scheduled crypto gains tax set for January 2025.

Originally, the taxation on income from virtual assets, including the “transfer or lending of virtual assets,” had already been postponed from 2023 to 2025. However, the latest promise from the ruling party suggests a potential postponement until 2027. An unnamed official from the People Power Party leadership was quoted in a local report on Monday stating the need for a two-year delay until the amendment is passed and the system is effectively implemented.

On Tuesday, the opposing Democratic Party announced its promise to permit investors to purchase spot Bitcoin ETFs. The party is expected to unveil a comprehensive proposal to institutionalize and invigorate the cryptocurrency sector on Wednesday.

These political moves indicate that cryptocurrencies are becoming a significant election issue in South Korea. The country has witnessed a surge in interest among young individuals in their 20s and 30s engaging in crypto trading. The enthusiasm initially waned following the high-profile collapse of Terra, the blockchain led by Do Kwon. This led to a series of regulatory measures that seemed like a crackdown on the industry. However, the sentiment has gradually shifted, as previously reported by CoinDesk from Korea in September 2023.