South Korea Considers The Taxation of Bitcoin Users
The country's government is planning to create better regulations for Bitcoin and the user's taxes.
A few days earlier, South Korea’s deputy prime minister Kim Dong-yeon, announced that the government is considering some ways to make better regulations for local Bitcoin markets.
In addition, they aim to make regulations about Bitcoin taxes as well, but this will not happen in 2018’s amendment of the tax law.
South Korea may follow Japan’s taxation policy
From the beginning of 2017, the government of South Korea has adopted light regulatory frameworks for Bitcoin users, investors, and businesses. These regulations are similar in structure to the policy introduced by Japan FSA (Financial Service Agency) and the Japanese government.
At the moment, crypto exchanges and trading platforms enjoy the luxury to operate in both countries, with minimal government supervision.
In July, the Japanese government nullified the 8% consumption tax on Bitcoin, in an attempt to assist the rapid growth of the Japanese cryptocurrency market.
Furthermore, South Korean regulations of 2017 aimed to provide flexibility to Bitcoin and business. So it’s possible that the government of South Korea will introduce a Bitcoin tax policy similar to that of the Japanese government.
Concerns about the centralization of trading
Several government officials, agencies, and Bitcoin communities are afraid of centralization of trading in South Korea. This is because ‘Bithumb’, South Korea’s largest digital currency exchange and the world’s second largest crypto trading platform is responsible for approximately 70% of the country’s Bitcoin trades.
Mr. Dong-Yeon is searching potential ways to distribute Bitcoin trading volumes to a wider range of trading platform in the market.
Banks are testing Bitcoin wallets
Also, some of the largest commercial banks and financial institutions of the country (such as Shinhan) are already testing Bitcoin wallet and vault systems. They want to come up with a long-term strategy to establish a secure platform, in which Bitcoin users can store their funds.
Shinhan claimed that a vault service for Bitcoin users is necessary, taking into account the hacking of Bithumb twice in 2017.
On the other hand, the nature of Bitcoin is a decentralized network, as it exists on a peer-to-peer protocol. Therefore, the safest way to store the major digital currency is on non-custodial wallet platforms. This way users gain total control of their funds and private keys.
Either way, the attempts of South Korea to assist the rapid growth of cryptocurrencies is definitely a really good sign for them.