With just three weeks remaining until the general election, South Korea’s political parties are actively seeking support from crypto investors, recognizing their emergence as a pivotal voting group. Amidst the growing popularity of cryptocurrencies in the country, parties are addressing crypto-related policies to appeal to this demographic.
Bitcoin’s recent price surge, reaching 92.1 million won ($68,654) on Upbit, the largest cryptocurrency exchange in South Korea, has garnered significant public attention. Despite a slight dip from its peak of 105 million won, the price still reflects a substantial increase of over 60% since the beginning of the year.
Both major parties, the conservative People Power Party (PPP) and the liberal Democratic Party (DP), have unveiled their policy proposals to regulate crypto-assets, albeit with differing approaches.
The PPP pledges to extend the tax deferral on crypto-assets, originally set to expire in January 2022, and introduce additional legislation to enhance investor protection. They also aim to establish standard rules for regulatory filings by crypto exchanges.
In contrast, the DP proposes a more progressive stance, advocating for the approval of cryptocurrency-backed ETFs and an increase in the deduction limit for capital gains from crypto-asset investments. Additionally, they pledge to ban crypto trading by lawmakers while parliament is in session.
However, the specifics of these policies are still being refined, raising concerns among voters. President Yoon’s recent pledge to eliminate the planned capital gains tax on stock investment gains by 2025 has sparked worries about potential disparities in tax treatment for gains from crypto-asset investments.
Meanwhile, discussions are underway regarding the potential approval of spot Bitcoin exchange-traded funds (ETFs) in South Korea. While some authorities express positivity towards virtual assets, others remain cautious. The country currently does not offer spot Bitcoin ETFs for crypto investors, and in January, financial authorities announced no plans to regulate the sales of Bitcoin futures ETFs.
As the election approaches, the stance of political parties on crypto-related policies will likely play a significant role in shaping voter decisions in South Korea.