South Korea has seen a dramatic increase in crypto investments lately. Unlike in the U.S, South Korean regulatory bodies had initially kept themselves from intervening in the crypto space. Lee Ju-yeol, the Bank of Korea’s governor, claimed that cryptocurrencies pose certain limitations as a mode of payment. The crypto industry has gained massive mainstream exposure this year, making regulators take a serious look at crypto regulations.
Crypto assets have no intrinsic value.
During a news conference that followed a recent monetary policy committee meeting, the Bank of Korea’s governor said, “The BOK’s stance on cryptocurrency hasn’t changed from the previous position that crypto assets have no intrinsic value.” The governor highlighted the “volatile” nature of cryptocurrencies and commented that it is incredibly difficult to estimate its appropriate price. The governor also commented on the country’s own CBDC plans. He said that even though the issuance of CBDCs in South Korea would take time, he will not make a definitive statement with respect to its potential impact on the markets.
South Korea plans to impose a 20 percent tax on cryptocurrency profits.
BOK’s governor also cited a recent statement made by U.S Federal Reserve Chairman Jerome Powell. In a recent interview, Powell underlined his position on cryptocurrencies, a position quite congruent to his predecessor. He said, “They’re really vehicles for speculation. They’re not really actively used as payments.” As reported earlier, U.S Treasury Secretary Yellen highlighted that she views bitcoin as a “highly speculative asset,” with the same being a very “inefficient” way of conducting transactions. South Korea’s Ministry of Economic and Finance is set to impose a 20 percent tax on cryptocurrency profits from 1 January 2022. The announcement also highlighted that profits exceeding 2.5 million won would be subject to tax.
