After several months of campaigns and heated political exchanges, South Korea finally had a new president. Yoon Suk-yeol won a hotly contested election and will take over leadership of the country in May. He is a big digital currency and NFT fan and has previously promised to deregulate the South Korean digital currency market once he takes over.
Yoon edged out the Democratic Party’s liberal candidate Lee Jae-myung in a contest that was more closely contested than previously thought. With 77% of the eligible voters turning up to cast their votes, Suk-yeol got 48.6%, less than a percentage point ahead of his opponent.
Describing his victory as one of the people, he pledged to pay attention to people’s livelihoods, provide welfare services for the needy and restore South Korea’s position in international circles. He also promised to scrap off the Ministry of Gender Equality and Family as he held that there’s no sexism in the country, which according to political experts, endeared him to the young male voters.
For the digital asset market, the political novice’s presidential victory is quite significant. Yoon is a big digital asset fan, and during his campaign, he made promises to the industry to place measures that can foster its growth. His opponent also appealed to digital currency fans, seeking out the support of the young voters, many of whom have tried their hand in digital asset trading.
As one expert opined, the two candidates tried to distance themselves from the current regime, led by the incumbent Moon Jae-in, which has clamped down on the industry for years.
“It’s the result of the past government continuously making negative policies stifling the real, large-scale presence of the virtual asset market,” Park Sung-jun, the head of the blockchain research center at Dongguk University, told one outlet.
Moon’s government has implemented some tough regulations that have forced about 70 digital asset exchanges to shut down. Some requirements, such as having every exchange partner with a local bank for real-name verification, have proven too challenging for smaller exchanges, with most banks shunning them. This has given an even bigger market share to the Big Four—Korbit, Coinone, Bithumb, and Upbit—since they can afford to comply with the tough requirements.
The shutdowns are in great contrast to the growth of the Korean market. The Korean won is currently the third-most transacted fiat currency in digital asset circles.
In his campaign pledges, Yoon vowed to deregulate the industry, arguing that most of the measures his predecessor had put in place were limiting the growth of the industry.
Two months ago, he stated, “To realize the unlimited potential of the virtual asset market, we must overhaul regulations that are far from reality and unreasonable. We must shift to a negative regulation system to ensure at least the virtual asset market has no worries.”
The South Korean digital asset market has also been contending with taxes. As CoinGeek has reported, the presidential aspirants pushed for the 20% tax to be pushed to next year, and even though the government fought back fiercely, they had their way.
Yoon has pledged to revise the tax measures as well. For one, the taxable threshold for digital asset traders will be revised upwards from 2.5 million won ($2,100) to 50 million won ($40,450). This would place digital assets in the same category as capital gains from stocks.
In his most unique proposal, the president-elect wants to have insurance policies for investors, insuring them from the loss of their assets to hacks and other cybersecurity risks. This would be a game-changer, with the digital asset industry losing billions of dollars to hackers every year, especially in emerging unregulated sectors like NFTs and DeFi.
Market participants eagerly await to see just how far the new leader can push the industry.
“I look forward to seeing the new president lead market growth through mixing regulations in a new direction of policies, where investments in cryptocurrencies are recognized as real investment measures, just like stock investment,” Chung Seung-mo, a 27-year-old digital asset investor, told one news outlet.
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