South Korean Political Campaigns Provide Cryptocurrency Incentives, Aim for Bitcoin ETF Accessibility

Political campaigns in South Korea are utilizing the nation’s significant crypto market to engage voters in the lead-up to the parliamentary election.

Both leading political factions, President Yoon Suk Yeol’s People Power Party and the opposition Democratic Party, have incorporated crypto-related commitments into their campaign agendas.

The People Power Party has committed to postponing the enforcement of a digital-asset tax, acknowledging the significance of the crypto sector to the electorate.

Conversely, the Democratic Party has concentrated on removing limitations on exchange-traded funds (ETFs), including those that encompass US Bitcoin products.

South Korea to Provide Access to ETFs

Hwanseok Choi, a policy expert from the Democratic Party, mentioned that their manifesto endorses the inclusion of both local and international ETFs, according to a Bloomberg report.

The initiative to permit ETFs that invest directly in Bitcoin gained momentum following the US approval of such products in January.

These Bitcoin ETFs have already amassed approximately $57 billion in assets.

However, South Korea’s securities regulator has raised concerns that facilitating these products domestically could breach legal regulations, leading to confusion and affecting the market.

The People Power Party’s manifesto does not specifically tackle this issue, but it assures a delay in the proposed taxes on crypto profits beyond the previously scheduled date of 2025.

South Koreans have been actively involved in the recent crypto bull market, and the nation is recognized for its enthusiasm for various cryptocurrencies beyond Bitcoin.

Upbit, the largest domestic crypto exchange, consistently ranks among the leading global platforms in terms of trading volume.

Last month, South Koreans invested over $200 million in shares of MicroStrategy Inc., a US-listed firm that holds Bitcoin. They also expressed interest in US crypto-futures ETFs, which are authorized products.

South Korean Candidates Possess Digital Assets

Notably, even candidates running for election have exposure to cryptocurrencies, with around 7% of them owning digital assets, as reported by Yonhap, which analyzed their asset disclosures.

While the crypto market is linked to significant risk, the recent increase in its value has eclipsed previous setbacks.

South Korea is set to implement an investor-protection framework in July, and both political parties have signaled their intention to pursue more extensive regulation for the sector.

Recently, it was reported that South Korea plans to enforce stricter regulations for token listings on exchanges, including the prohibition of tokens that have experienced hacks.

The country’s financial authorities are preparing to issue guidelines for virtual asset trading support, anticipated to be released by the end of this month or early next month.

The forthcoming guidelines will stipulate that virtual assets with a history of hacking or security breaches will not qualify for listing unless the cause of the incident has been sufficiently clarified and the damages have been rectified.

Moreover, the guidelines indicate that for foreign virtual assets to be listed, a white paper or technical manual must be available for domestic use.

An exception has been made for virtual assets traded on overseas exchanges for more than two years.

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