The Democratic Party, the main opposition party in South Korea, is proposing to allow the public and the financial sector to invest in spot bitcoin exchange-traded funds (ETFs), according to local media reports on Tuesday.
The party plans to let investors buy spot bitcoin ETFs using their individual savings accounts (ISAs), a Seoul Economy Daily report said. An ISA is a type of account that allows people to invest in various funds or securities and also gives them tax benefits for up to two million Korean won ($1,497) of their financial income.
The news comes as both the ruling and the opposition parties have reportedly made opening up spot bitcoin ETFs one of their central promises for the upcoming general election on April 10.
The country’s financial regulator has banned financial institutions from launching cryptocurrency ETFs, and local investors are prohibited from investing in spot crypto ETFs. However, they can still access foreign crypto futures products.
A Democratic Party member said that the party may seek to change the existing financial laws to allow spot bitcoin ETFs if the financial authorities reject the idea, Seoul Economy Daily reported.
The opposition party also echoed the ruling party’s pledges a day earlier, such as removing the ban on institutions from directly investing in crypto and increasing the tax exemption limit for crypto gains from 2.5 million won to 50 million won.
The Democratic Party will reveal its plan for the digital asset industry on Wednesday.
South Korea Spot Bitcoin ETFs See Positive Signs
The opposition party’s support for spot bitcoin ETFs is seen as a positive sign for the crypto industry in South Korea, which has been multiplying in recent years. According to Statista, South Korea had the highest percentage of crypto ownership among 18 countries surveyed in 2022, with 33% of respondents saying they owned some form of cryptocurrency. The country also had the most prominent blockchain companies in 2022, with 1,200 firms operating.
The crypto industry has also attracted attention from major corporations and investors in South Korea. Earlier this month, SK Group, one of the largest conglomerates in the country, announced that it would invest $1.6 billion in semiconductors and blockchain technology over the next three years. The group said it would collaborate with global partners to develop innovative blockchain and artificial intelligence solutions.
The crypto market in South Korea has also been showing resilience amid global volatility and regulatory uncertainty. According to CoinDesk, the bitcoin price in South Korea was trading at a premium of over 5% compared to the global average on Thursday, indicating strong demand from local buyers. The country’s largest crypto exchange, Upbit, also reported a record high of 12.57 trillion won ($9.4 billion) daily trading volume on Feb 19.
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