A Leaked Report Says South Korea Will Have a Cryptocurrency Legal Framework by 2024

With the election of Yoon Suk-yeol as South Korea's new president, the new government wasted no time in trying to maintain South Korea's status as an innovation hub. South Korea hopes to introduce comprehensive cryptocurrency legislation in 2023 and institutionalize the crypto industry in 2024.

Citing a leaked government document, South Korean newspaper Kookmin Ilbo reported on Wednesday that the government hopes to introduce the Digital Asset Basic Act (DABA) next year and introduce more legislation by 2024. The bill is part of the 110 policy goals the new president introduced earlier this year.

As the local Financial Stability Board (FSB) will work with the Basel-based Bank for International Settlements (BIS) and US and EU regulators, the bill will be drafted according to international norms and will draw on the experience of the world's largest economy.

While there aren’t many details, what is known so far is pretty bullish for the crypto industry. The government plans to expand the existing fiat trading infrastructure, allowing more banks to create their own fiat trading platforms. Currently, only four banks in South Korea have this capability. Additionally, South Korean authorities want to institutionalize non-fungible tokens (NFTs) and introduce a regulatory framework for initial coin offerings (ICOs).

The issuance of a central bank digital currency (CBDC) is also under discussion. The Bank of Korea completed the first phase of simulation testing in January 2022.

Although the government of Yoon Seok-yue has confirmed the authenticity of the document, it is not the final draft.

On May 3, Yin Xiyue announced that he will push to postpone the taxation of cryptocurrency investment income until the enactment of the Basic Law on Digital Assets, which means at least until 2024. Under new crypto tax rules, the South Korean government will impose a 20 percent tax on cryptocurrency earnings above $2,100 per year.

Hours after South Korean media reported the leaked documents, Yoon met with Central African Republic President Faustin-Archange Touadéra to discuss cooperation between the two countries. In April, Touadela signed a bill introducing a legal framework for digital assets and making Bitcoin (BTC) legal tender.

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