Blockchain companies, except for cryptocurrency exchanges, will enjoy the status of venture startups for technological development, according to Hong Nam-ki, deputy premier and economic minister-designate.
He said the government would decide whether to impose a tax on cryptocurrency trading after the tax office completes its database and taking into a global trend.
He made the statement in a written report to lawmaker Kim Jung-woo of the governing Democratic Party.
Hong said the virtual currency or the cryptocurrency is an electronic symbol issued by the private companies, not by the central bank or financial institutions. He said about 2,000 cryptocurrencies get traded worldwide. In South Korea, 160 such currencies get traded, he added.
Hong said the tax office had formed a task force with private experts to study foreign cases of taxation on the cryptocurrencies. He added that it might take time for the government to levy a tax on cryptocurrencies.
He said the government would be cautious in regulating cryptocurrencies because no global consensus on regulation has yet to come out; because the government has to introduce a system of protecting investors and because the cryptocurrency market has the possibility of overheating before overcooling.
His statement indicated that the government has no immediate plan to legalize the ICO market.
Hong said the government would decide whether and when to allow the initial coin offering. “Before South Korea discuss the opening of the ICO market, we must look into the market situation, global trend, investor protection methods,” he said, “ The Financial Supervisory Service has been collecting the market data and pooling opinions from experts.”
Hong is to become the minister of the Strategy and Finance after passing through the National Assembly hearing.