Where South Korea’s Democratic Party and People Power Party Stand on Crypto Policies

Today marks South Korea’s elections, with the results likely to shape the regulatory landscape for the cryptocurrency industry. The Democratic Party of Korea (DPK) and the People Power Party (PPP) are the two major political players in the country, with the Democratic Party being the largest since December 2022, boasting around 4.85 million members. Cryptocurrency has been a prominent issue in South Korean elections since 2022, and today’s parliamentary elections will be pivotal in determining the direction of crypto regulation.

Both parties have differing views on crypto regulation, which impact its adoption, taxation, and legality. The election outcome will significantly influence investor sentiment and market dynamics, particularly in the crypto market. Supportive policies may attract more investment into cryptocurrencies, while uncertainty or unfavorable policies could result in market volatility.

South Korea holds substantial influence in the global crypto market, with changes in its regulatory framework or market dynamics having ripple effects internationally. Elections in South Korea play a crucial role in shaping the regulatory environment, market sentiment, and innovation within the crypto industry.

Here’s an overview of the crypto regulation stances of the two main political parties in South Korea:

Ruling Party – People Power Party (PPP) The ruling party has expressed willingness to delay the implementation of digital asset taxation and is open to discussions on the timing and specifics of such taxation. Plans include establishing administrative measures for digital assets and standardizing listing criteria for centralized exchanges to protect investors. Token launches with investor protection mechanisms will be permitted.

Digital Asset Investor Protection Law Phase 2 The PPP aims to advance Phase 2 of the Digital Asset Investor Protection Law, which seeks to regulate and safeguard investors in South Korea’s digital asset market. This initiative aligns with broader government efforts to establish a legal framework for cryptocurrencies, including measures to prevent fraud and illegal activities.

Opposition Party – Democratic Party of Korea (DPK) The Democratic Party proposes lifting restrictions on investing in U.S. Spot Bitcoin ETFs for digital assets and adding digital asset ETFs on Individual Savings Accounts (ISA) for tax benefits. Additionally, the party aims to raise the digital asset taxation threshold from $1.85K to $37K for untaxed income.

Other proposals by the opposition include implementing a combined profit and loss standard for taxation over five years and introducing a business law for digital asset enterprises. The party also plans to develop a monitoring system to consolidate order books for Centralized Exchanges (CEX) operating in South Korea.