The South Korean Ministry of SMEs and Startups announced on Wednesday plans to lift restrictions on crypto-related companies qualifying as venture firms.
Currently, companies operating in the "virtual assets" sector are excluded from the government's risk classification, limiting their opportunities to receive various tax benefits and financial support. The ministry stated that the proposed amendment reflects a "shift in perception" towards the digital asset industry and establishes "legal and institutional safeguards" aimed at protecting users.
The announcement noted, "The government is currently focused on nurturing the digital asset industry," and that legal protections for users have been in place since the implementation of crypto regulations last year. Therefore, restricting the industry is deemed "inappropriate."
The ministry will accept public feedback on the proposal until August 18. The final implementation date has not yet been announced.
The proposed changes will allow crypto companies to qualify as venture firms. Additionally, existing venture firms can expand into the digital asset sector without losing their classification. "This is expected to revitalize and expand the venture ecosystem and support the growth of the virtual asset industry."
Companies that obtain "venture" status can access a range of government benefits in South Korea. These include a 50% corporate income tax reduction for five years, a 75% reduction in commercial real estate acquisition tax, and discounts of up to 70% on broadcast advertising.
The proposed changes follow South Korea's growing trend of crypto-friendly policies.
On Sunday, the Bank of Korea informed commercial banks participating in its central bank digital currency (CBDC) pilot that the experiment is temporarily suspended. A senior bank official told local media that the pause is to give the government time to clarify its stablecoin policy and how the CBDC fits into the broader digital financial ecosystem.
Newly elected President Lee Jae-myung proposed a series of crypto commitments during his campaign, including allowing the issuance of stablecoins pegged to the local fiat currency.
On Tuesday (July 8), Cointelegraph reported that shares of Kakao Bank, National Bank, and Korea Industrial Bank rose by 10% to 19% after applying for stablecoin trademarks, indicating increased investor confidence in the country's cryptocurrency direction.
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Original text: “South Korea Plans to Lift Cryptocurrency Venture Investment Restrictions”
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