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- South Korea has reaffirmed its positive stance on digital assets while delaying crypto tax, despite ongoing political uncertainty following the impeachment of President Yoon Suk-yeol.
- South Korea is closely monitoring global developments, particularly U.S. crypto policies under President-elect Donald Trump.
South Korea has re-emphasized its position to embrace crypto amid ongoing political challenges. On December 18, a government representative stated, “The government is not negative on cryptoassets. As regulations and related systems are still in the process of being built, we decided to defer [the crypto tax].”
South Korea’s Crypto Tax Scene
This comes after intense political turmoil in South Korea, per the CNF report. The impeachment of President Yoon Suk-yeol last month left the country in limbo, with the interim administration, led by the People’s Power Party, working to keep the economy stable and ensure the budget for 2025 passes smoothly. The constitutional court still has to finalize the impeachment decision.
The most significant decision for the crypto industry was when the National Assembly voted to delay the implementation of a crypto tax until 2027. This deferment gives the government ample time to put in place a comprehensive regulatory framework, reported CNF. The financial regulators and the central bank are, at the moment, coming up with policies aimed at protecting investors while ensuring innovation and financial stability. According to The Korea Times, Government official Choi said:
The government is watching global crypto trends, including [policies from]the United States. Concrete actions will come after the new U.S. administration takes office.
The delay aligns with South Korea’s intent to observe international developments, particularly the United States’ evolving stance on digital assets under President-elect Donald Trump.
Despite the political uncertainty, crypto trading activity on major South Korean exchanges, including Bithumb and Upbit, has been robust. The weakening of the Korean Won against the U.S. dollar has prompted many investors to use cryptocurrencies as a hedge.
Global Trends and Challenges Ahead
South Korea’s Korbit Research Center also emphasized the escalating global competition surrounding Bitcoin, along with policy changes in crypto tax. The center said that, with the U.S. positioning BTC as a strategic asset, the expectation is that geopolitical rivalries may intensify. According to a recent Korbit report, “The race to secure Bitcoin at a national level is already underway. If the U.S. Bitcoin Act is enacted, the so-called ‘Bitcoin space race’ among nations could become a reality.”
For the United States, Senator Cynthia Lummis recently floated a bill that looks forward to establishing a national Bitcoin reserve, calling the latter critical for maintaining global leadership. “America won the Space Race. Now America must win the Bitcoin Race,” she tweeted via X on December 12.
China, notwithstanding its internal ban on cryptocurrency trading, is said to keep a close eye on these developments. Analysts believe that it might resort to strategic reserve Bitcoin considering the global swing. In Russia, it was only recently that President Vladimir Putin had admitted the functionality of Bitcoins, considering this in view of frozen overseas reserves.
However, as the international momentum for Bitcoin gathers steam, challenges persist. Federal Reserve Chair Jerome Powell recently dismissed the possibility of holding BTC. “We’re not allowed to own Bitcoin. The Federal Reserve Act says what we can own, and we’re not looking for a law change,” Powell said in a news conference.
