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South Korea to begin enforcing digital currency regulatory framework by 2024: report

South Korea’s new government regime is racing towards introducing all-inclusive regulations for the digital currency industry. The country could see these regulations enacted as soon as 2023, with enforcement starting in 2024.

This is according to a report by South Korean news outlet Kookmin Ilbo, which laid hands on a leaked government document outlining the plan. The document titled the ‘National Task Implementation Plan’ confirmed that South Korean President Yoon Suk-yeol is looking to introduce the Digital Asset Basic Act (DABA) in 2023, the report said.

These planned legislations raise hope for the South Korean digital currency industry. The implementation plan will incorporate digital assets and related activities, including NFTs and ICO, into the institutional system to boost investor confidence.

The government will review the Bank of Korea Act that introduces issuing a central bank digital currency (CBDC) under the plan. It will also allow more banks to be able to partner with digital currency exchanges to provide real-name verification services.

“We will strengthen the link between digital asset trading accounts and banks by expanding financial institutions that provide real-name verification services for virtual asset transactions,” the report quotes the Presidential Transition Committee saying.

Meanwhile, the document also mentions the government’s intent to work with other global regulators, including the Bank of International Settlements, the European Union, and the United States to streamline digital currency regulations.

New regime ending restrictive digital currency regulations

The plan is in keeping with the campaign promises made by South Korea’s president-elect, Yoon Suk-yeol. Since winning the election, he has stated that there will be no taxation of the industry until proper regulations are put in place.

The new digital currency tax regime is also in the works. Under the new tax rules being considered, the government will levy a 20% tax on digital currency gains above $2,100 per year.

South Korea was noted to be spiraling towards driving out the industry from its borders with restrictive regulations. Last year, Bloomberg noted that many small digital currency exchanges in the country would end their operations following the implementation of strict reporting requirements.

This year, the country has followed up with a new travel rule for digital currency exchanges. The rules which intend to prevent money laundering and terrorism financing have hit DeFi and NFT platforms the hardest, as CoinGeek has reported.

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