The crypto market has been a crucial member of the world economy for over a decade. In some countries, like South Korea, crypto tax was about to be introduced several times. However, it won’t happen for at least two more years.
Korea crypto tax: Political background
The immense growth of crypto worldwide faces multiple challenges, including national restrictions. For countries like South Korea, the crypto tax could potentially be another source of income for the national budget. Even before the U.S. elections, assets like Bitcoin-USD or ETHUSD brought massive attention to the market.
The political scene in South Korea is divided, and each decision is discussed and analyzed in a complex way. The ruling People Power Party suggested a two-year delay in the crypto tax, planned for 2025. At first, it wasn’t a good idea for the left-wing Democratic Party of Korea, which holds the most seats in the legislature. All in all, after several months of debating, the left-wing party agreed on the proposed delay.
What was the idea behind the crypto tax in Korea? Investors, whose gains on the crypto market topped 2.5 million Korean Won (approx $1,750), were about to pay 20% from this income. Democratic Party pushed for implementing this tax on January 1, 2025, but with a higher tax-deductible limit of 50 million Korean Won.
Why is it so important?
Investors worldwide look for opportunities to invest in cryptocurrencies in various markets. Usually, they choose the regions with the most favorable regulations and taxes, which come together with accessibility. In the Far East, more countries have opened their doors to cryptocurrencies. The most recent example is the introduction of cryptocurrencies into the digital Hong Kong bank’s offer.
By luring traders into the South Korean market, the government wants them to stay and emerge in the national economy. It might have an impact on other financial assets, including those that are most important to the South Korean economy. USDKRW is the combination of the national currency with the U.S. Dollar, while USDJPY includes the Japanese Yen, as Japan is a crucial partner in the Far Eastern market.
The delay of the Korean crypto tax has more impact than the most popular duo. Bitcoin and Ethereum may increase in Far Eastern society, but this is also a chance to gain momentum for other altcoins. Solana (SOLUSD) is getting more and more interest worldwide, and national regulations supporting the crypto market will favor these types of projects.
Crypto in Korea: Tax history
Initially, the South Korean government intended to introduce the crypto tax in 2021. It has been constantly rescheduled since then. What were the reasons for these changes? Multiple political issues, regulations, economic aspects, and the growing sentiment of cryptocurrencies.
Traders should monitor these types of initiatives. It may not impact the crypto prices rapidly, but growing sentiment on these assets in markets like South Korea will impact it in the long haul.
