South Korea’s new government regime is rushing to introduce comprehensive regulation for the digital currency industry. The country could see these regulations promulgated as early as 2023, with entry into force from 2024.
That’s according to a report by South Korean media outlet Kookmin Ilbo, which got their hands on a leaked government document outlining the plan. The document titled “National Task Implementation Plan” confirmed that South Korean President Yoon Suk-yeol plans to introduce the Basic Digital Assets Act (DABA) in 2023, according to the report.
These planned legislations raise hopes for the South Korean digital currency industry. The implementation plan will integrate digital assets and related activities, including NFTs and ICOs, into the institutional system to build investor confidence.
The government will revise the Bank of Korea Act which introduces the issuance of a central bank digital currency (CBDC) as part of the plan. It will also allow more banks to partner with digital money changers to provide real name verification services.
“We will strengthen the nexus between digital asset trading accounts and banks by expanding financial institutions that provide real-name verification services for virtual asset transactions,” the report said, citing the Presidential Transition Committee .
Meanwhile, the document also mentions the government’s intention to work with other global regulators, including the Bank for International Settlements, the European Union and the United States to streamline regulations on digital currencies.
New Regime Ending Restrictive Digital Currency Regulations
The plan is in line with campaign promises made by South Korea’s President-elect Yoon Suk-yeol. Since winning the election, he has said there will be no taxation of the industry until proper regulation is in place.
The new digital currency tax regime is also in the works. Under the proposed new tax rules, the government will levy a 20% tax on digital currency earnings over $2,100 per year.
It was noted that South Korea was moving towards expelling the industry from its borders with restrictive regulations. Last year, Bloomberg noted that many smaller digital currency exchanges in the country would cease operations after implementing strict reporting requirements.
This year, the country followed with a new travel rule for digital currency exchanges. Rules to prevent money laundering and terrorist financing have hit DeFi and NFT platforms the hardest, as CoinGeek reported.
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