Political parties in South Korea have turned to using incentives in the cryptocurrency industry to woo potential voters as the parliamentary elections draw closer. According to a Bloomberg report, the opposition Democratic Party has promised to remove restrictions on several domestic and international crypto products. Some of these include digital assets and exchange-traded funds (ETFs) in the United States.
South Korea party teases access to spot Bitcoin ETFs
South Korean regulators have been vocal about the domestic laws that ETFs could violate following its approval in the United States in January. “We’re going to allow the ETFs, whether domestic or overseas,” Democratic Party policy specialist Hwanseok Choi said, citing its manifesto. Choi is a member of the party’s think tank and was one of the people that drew up the manifesto.
Also looking to capitalize on digital assets as incentives to woo voters is President Yoon Seok Yeol of the People Power Party. In his statement, he vowed to move the taxes on profits of digital assets which was scheduled to begin in 2025 forward. Yoon will be looking to wrestle control of the legislature from the progressive group led by the Democratic Party.
Anticipated regulations and investor trends
According to official figures, about six million South Koreans were involved in crypto trading on licensed exchanges in the first half of 2023. This figure represents about 10% of the entire population of the country. South Koreans were also active in the last bull run, with official sources noting that they are drawn towards smaller cryptocurrencies. Official sources also noted that about 7% of the candidates involved in the election currently hold crypto.
Data from the Korean Securities Depository shows that South Koreans have invested about $200 million in the shares of United States firm MicroStrategy (MRST). The company’s exposure to Bitcoin has prompted analysts to consider it a leveraged Bitcoin ETF. Some South Koreans are also in the US crypto futures ETF market, which is permitted by law.
Despite the promises made by the politicians in the run-in to the elections, there is an upcoming regulation on digital assets. Financial authorities released a statement noting the release of new guidelines for listing tokens on centralized exchanges. According to outlets in South Korea, the authorities will prohibit exchanges from listing cryptocurrencies involved in hacking incidents until the cause is determined. Also, exchanges will only be allowed to list digital assets with manuals or white papers.
