Major advances are being made in South Korea, the nation’s financial watchdog is planning an organization-wide reshuffle, creating a new bureau to look at financial innovation policies and announcing a reduced tax policy for “new-growth technologies”.
New bureau for financial innovation
On Tuesday, South Korea’s Financial Services Commission (FSC) published a press release which reveals intentions to “better protect” its domestic financial consumers and make preparations for the financial innovation due to arrive with the Fourth Industrial Revolution.
In response to the growing prominence of cryptocurrencies as well as the fourth industrial era, the FSC has put together a new entity named the Financial Innovation Bureau (FIB).
This newly-formed bureau is designed specifically for “policy initiatives for financial innovation e.g. innovative financial services using fintech or big data and responses to new developments and challenges such as cryptocurrencies”.
It is another step by the pro-crypto nation to pre-empt the coming Digital Economy 2.0; recently the Korean financial watchdog also revealed its latest guidelines for cryptocurrency regulations which further provide consumer protections.
It is a timely press release, as on 10 July, anti-money laundering banking rules created by the FSC were officially enforced. Furthermore, the government is expected to reveal the final draft for new regulations are after a large opinion research operation has been conducted.
Reducing new-tech tax
In a report from CoinDesk Korea, the government has announced tax cuts for companies described as “new-growth technologies”, a term which encompasses 157 technologies across 11 areas which include, blockchain-based information security technology, quantum computing and commercialization facilities.
There is little clarity as to where exactly the government stands regarding blockchain technology, making it unclear on how blockchain-related banking projects will benefit from this announcement due to initial coin offerings and digital currencies still being considered as gambling or “multi-level fraud”.
A further detailed announcement is expected to arrive on 26 July, with further clarifications on the new-growth technology tax credit scheme.
This announcement, from the “Revitalization Support System for Investment Promotion” that took place at the ministerial meeting on 18 July, comes at a time when South Korean lawmakers across major political parties are submitting draft bills to clarify regulations on the nascent blockchain industry.
South Korea is perhaps one of the most active components in the future of blockchain and cryptocurrencies. Yhe nation tends to positively push the technology as well as legislation and regulation at unprecedented rates.
On 26 July, the flurry of draft bills being submitted to the South Korean National Assembly will end, and on this date also, the taxation details will be revealed. It appears as though South Korea is gearing up to tackle blockchain and cryptocurrencies ahead of 2019, which could prove favorable in the blockchain race.
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