South Korean Presidential Committee Endorses BTC Derivatives

The South Korean Presidential Committee is in the Bitcoin news now for officially recommending the government to allow financial institutions to launch cryptocurrency-based financial products.

As reports from the local English-language news outlet BusinessKorea showed on January 6, the committee endorsed products such as Bitcoin (BTC) derivatives and wants them to be allowed as part of a strategy which aligns with the institutionalisation of cryptocurrencies within the country.

Known as the PCFIR, the body suggested that the local financial sector should develop and introduce a Korean custody solution which will avoid relying only on foreign custodians when handling cryptocurrency assets. They also noted that Bitcoin (BTC) should be directly listed on the exchange in Korea – which is the country’s sole securities operator located in the Busan region.

The South Korean Presidential Committee also advised the government to consider designing business licenses or specific guidelines for cryptocurrency exchanges and integrating the products related to crypto assets in the financial system in the mid to long term.

“As of May 2019, daily crypto-asset trade hit more than 80 trillion won (over $68 billion) in the world, so it is no longer possible to stop crypto-asset trade. […] 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,” is the statement from the South Korean Presidential Committee.

Bitcoin and altcoin news readers should know that the PCFIR in South Korea was formed by a presidential decree in 2017 and is in charge of recommending the development of new science and technologies in the country. Now, the committee is known for organizing forums and deliberates on the roles of new technology which come in addition to organizing public campaigns and measures that will support the adoption of new technology.

Even though the policymakers in South Korea call on the government to provide a more comprehensive framework and infrastructure for cryptocurrencies, there are many gaps remaining. The government of the country stated that under the current law, it cannot impose income taxes on individual’s profits from crypto transactions.

However, this did not prevent the tax agency in the country from imposing a $68.9 million tax bill on the exchange Bithumb in 2019.