South Korea’s political campaigns are tapping into the nation’s flourishing crypto market to woo voters in anticipation of the parliamentary election.
The two primary political factions, namely President Yoon Suk Yeol’s People Power Party and the opposition Democratic Party, have integrated crypto-centric commitments into their campaign agendas.
The People Power Party has vowed to postpone the introduction of a tax on digital assets, acknowledging the significance of the crypto sector to voters.
Conversely, the Democratic Party has emphasized the removal of constraints on exchange-traded funds (ETFs), particularly those invested in US Bitcoin products.
South Korea to Offer Exposure to ETFs
According to a Bloomberg report, Hwanseok Choi, a policy specialist affiliated with the Democratic Party, indicated that their policy platform advocates for the inclusion of both domestic and international ETFs.
The push to permit ETFs directly investing in Bitcoin gained momentum following the US approval of such products in January. These Bitcoin-based ETFs have amassed approximately $57 billion in assets.
Nonetheless, South Korea’s securities regulator has voiced apprehensions that facilitating these products domestically could potentially breach regulations, leading to uncertainty and influencing the market.
The manifesto of the People Power Party sidesteps direct engagement with this controversy, instead committing to postponing planned taxes on crypto gains beyond the initially scheduled timeframe of 2025.
South Koreans have actively engaged in the recent crypto bull market, showcasing the country’s fervor for various cryptocurrencies beyond Bitcoin.
Upbit, the largest domestic crypto exchange, consistently ranks among the top global platforms in terms of trading volume.
In the past month alone, South Koreans poured over $200 million into shares of MicroStrategy Inc., a US-listed company with Bitcoin holdings. Additionally, they displayed interest in US crypto-futures ETFs, which are approved investment vehicles.
South Korean Candidates Own Digital Assets
Remarkably, even election candidates themselves have stakes in cryptocurrencies, with about 7% of them holding digital assets, as reported by Yonhap, which analyzed their asset disclosures.
Although the crypto market carries inherent risks, the recent upsurge in its value has eclipsed previous setbacks.
In July, South Korea is slated to roll out an investor-protection framework, with both political parties signaling their intent to pursue comprehensive regulation for the industry.
Recent reports indicate that South Korea is poised to enforce stricter regulations for token listings on exchanges, including measures to block tokens that have been involved in hacking incidents.
The financial authorities in the country are gearing up to unveil guidelines for supporting virtual asset trading, slated for release by the end of this month or early next month.
These forthcoming guidelines outline that virtual assets with a track record of hacking or security breaches will not qualify for listing unless a comprehensive explanation of the incident’s cause is provided, along with evidence of recovered damages.
Additionally, the guidelines stipulate that for overseas virtual assets to be listed, there must be a readily accessible white paper or technical manual available for domestic reference.
However, an exception provision has been introduced for virtual assets traded on overseas exchanges for more than two years.
