The South Korean Democratic Party is considering a plan to allow the issuance and trading of Bitcoin spot exchange-traded funds (ETFs). Additionally, they are seeking to introduce a "whitelist (temporarily named blue list)" system, which would only allow virtual assets issued and listed through public institutions to be included.
Profits from virtual asset (cryptocurrency) trading are scheduled to be taxed starting from 2025, with consideration given to raising the deduction limit from the current 2.5 million South Korean won to 50 million South Korean won. This stands in stark contrast to the People Power Party's announcement to postpone the taxation of virtual assets.
According to News1's report on the 20th, the Democratic Party is preparing the "Four Commitments to Digitize Assets" as part of its election vows. This commitment is set to be announced on the 21st.
The four major areas include: strengthening the foundation of the self-purification of the digital asset ecosystem; restructuring the virtual asset system; integrating virtual asset-linked products into the system; and promoting the legalization of security tokens (tokenized securities).
Firstly, the Democratic Party plans to swiftly promote "second-stage legislation for virtual assets," aimed at solidifying the foundation of the self-purification of the ecosystem. The "Virtual Asset User Protection Act," scheduled to be implemented in July, is the first-stage legislation, and actual provisions regarding virtual asset issuance must be included in the second-stage legislation. Additionally, the Democratic Party promises to install a comprehensive virtual asset monitoring system and integrate individual transaction order books (transaction ledgers). Currently, virtual asset exchanges share liquidity similar to stock markets. One of the commitments of the midnight market is to "prohibit legislators from trading virtual assets during meetings," which is interpreted as a measure taken in consideration of the controversy sparked by last year's Representative Kim Nam-guk's coin.
The plan to restructure the virtual asset system is similar to the People Power Party's commitment. This policy aims to gradually allow entities that are currently prohibited from investing in virtual assets to participate in the market. The idea is to involve institutional investors with professional knowledge in the market. Additionally, a system similar to Japan's virtual asset "whitelist" is being promoted. The Democratic Party announced its commitment to conditionally allow the issuance of virtual assets, while also operating the so-called "blue list," listing virtual assets that have been pre-screened by public institutions.
Taxation on virtual asset sales profits is scheduled to begin in 2025, with the deduction limit set to increase to 50 million South Korean won, and the introduction of a 5-year profit and loss deduction and loss carryforward deduction. The Democratic Party also promises to allow the issuance, listing, and trading of Bitcoin spot ETFs. This is also included in the People Power Party's commitment. Currently, trading Bitcoin spot ETFs through domestic securities companies is not possible due to directives from financial authorities. Therefore, the Democratic Party also adds that it will expand tax benefits by including virtual asset-related ETFs in individual comprehensive asset management accounts (ISA). Profits from ETF trading related to virtual assets are classified as financial investment income for taxation purposes and are subject to profit and loss deduction and loss carryforward deduction along with other financial investment products.
Additionally, legislation regarding tokenized securities is being sought, with only guidelines being announced last year without any legal revisions. This content is also consistent with the People Power Party's vow. The Democratic Party plans to summarize these details and announce them on the 21st. In particular, according to reports, the Financial Services Commission views the current regulations on Bitcoin spot ETFs as "national isolation policies contrary to the times" and intends to emphasize its intention to improve these regulations.
For more analysis, please follow Aibit's media account for real-time updates! This article is for reference only, does not represent any position, and is not intended as investment advice. Investment is risky, caution should be exercised.
Facebook: https://www.facebook.com/aibitcom
X: https://twitter.com/aibitcom
Telegram (CN): https://t.me/aibitcom_cn
Telegram (EN): https://t.me/aibitcom
Telegram (Announcements): https://t.me/aibitcom_announcements
Discord: https://discord.com/invite/aibitcom
Medium: https://medium.com/@aibitcom
Youtube: https://www.youtube.com/@aibitcom