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A South Korean Presidential Committee has proposed allowing financial institutions to launch cryptocurrency products, such as derivatives, Business Korea reports.
Launched in Oct. 2017, the Presidential Committee on the Fourth Industrial Revolution (PCFIR) deliberates upon and coordinates important policy matters pertaining to the development and acquisition of new science and technology, including artificial intelligence (AI) and data technology, as well as new industries and services necessary for Korean society’s adaptation to the 4th Industrial Revolution.
In its new report, the committee has made a number of recommendations with the objective of bringing crypto-related products into the financial system.
"As of May 2019, daily crypto-asset trade hit more than 80 trillion won (about US$69 billion) in the world, so it is no longer possible to stop crypto-asset trade,” the PCFIR said.
Among these is included a proposal to bring various terms such as cryptocurrencies and virtual currencies under the term “crypto assets.”
Furthermore, in a bid to encourage the blockchain and crypto industry, the PCFIR has urged the government to allow financial companies to launch futures products based on Bitcoin prices. It has also proposed the listing of Bitcoin directly on the Korea Exchange (KRX).
The committee has also called upon the financial sector to develop a domestic cryptocurrency custody solution to avoid the dependence on foreign solutions.
Importantly, it has advised the government to consider introducing a business licensing regime for crypto-asset exchanges and guidelines for this emerging sector.
"The Korean government has to gradually allow institutional investors to deal in crypto assets and promote over the counter (OTC) desks dedicated to institutional investors’ trade,” it added.
Last November, the National Assembly’s national policy committee passed a bill that aims to create a legal basis for cryptocurrencies in the country. The bill will categorize cryptocurrencies as digital assets and require crypto businesses to report to and register as digital asset businesses with the Financial Services Commission’s (FSC) Financial Intelligence Unit (FIU).
More recently, reports suggested that South Korea is currently looking to tax capital gains from cryptocurrency transactions. The Ministry of Economy and Finance is expected to introduce a bill on these lines in tax regulations this year.
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