By Kim Yoo-chul
Amid growing calls that cryptocurrencies need universal regulation, Korea is seeking international cooperation for transparency and security regarding digital tokens.
The Ministry of Strategy and Finance said Monday it had sent officials of its taxation and economic policy divisions to Japan last week for consulatations.
"They were sent to discuss oversight of the cryptocurrency market. The ministry is particularly interested in whether Japan has detailed plans for the imposition of capital gains tax for earnings from cryptocurrency trading," said an official from the ministry. He added that they met with executives from the private sector and government officials who are deeply involved with crypto trading-related policies and investment.
The ministry is also planning to send officials to the United States, the United Kingdom and Germany to cooperate with authorities in these countries on new rules for cryptocurrency trading.
Finance Minister Kim Dong-yeon told lawmakers at the National Assembly last week that the International Monetary Fund (IMF) has called for global cooperation on cryptocurrency trading, warning of the risks of the surging prices of digital coins.
The minister said it was too early to talk about setting common rules, but stressed Korea could follow guidelines set through international cooperation.
The country's central bank, financial regulators, tax agency and justice ministry argue that cryptocurrencies aren't currencies and can't even be considered as financial products. Nevertheless, Korea plans to impose a tax on capital gains earned via their trading.
There is no common or standardized legal framework at the international level. In Iceland, for instance, trading of bitcoins is prohibited under the Icelandic Foreign Exchange Act. Regulation without prohibition is currently being sought in Europe. The European Commission (EC) is hoping to modify the Fourth Anti Money Laundering Directive, adopted in May 2015, to include cryptocurrencies.
The finance ministry said there have been some indications of what should be discussed at the upcoming G20 meeting of finance ministers in March.
"Given the moves seen in the United States, Germany and France, it's highly likely that the G20 meeting will be very focused on cryptocurrencies," said an official, adding the ministry has been in talks with authorities in the United States to develop systems to block attempts at money laundering using cryptocurrencies.
"There is a risk that virtual currencies could be used by terrorist organizations to circumvent the traditional financial system and conceal financial transactions, as trading can be carried out anonymously," the EC said.
Amid growing calls that cryptocurrencies need universal regulation, Korea is seeking international cooperation for transparency and security regarding digital tokens.
The Ministry of Strategy and Finance said Monday it had sent officials of its taxation and economic policy divisions to Japan last week for consulatations.
"They were sent to discuss oversight of the cryptocurrency market. The ministry is particularly interested in whether Japan has detailed plans for the imposition of capital gains tax for earnings from cryptocurrency trading," said an official from the ministry. He added that they met with executives from the private sector and government officials who are deeply involved with crypto trading-related policies and investment.
The ministry is also planning to send officials to the United States, the United Kingdom and Germany to cooperate with authorities in these countries on new rules for cryptocurrency trading.
Finance Minister Kim Dong-yeon told lawmakers at the National Assembly last week that the International Monetary Fund (IMF) has called for global cooperation on cryptocurrency trading, warning of the risks of the surging prices of digital coins.
The minister said it was too early to talk about setting common rules, but stressed Korea could follow guidelines set through international cooperation.
The country's central bank, financial regulators, tax agency and justice ministry argue that cryptocurrencies aren't currencies and can't even be considered as financial products. Nevertheless, Korea plans to impose a tax on capital gains earned via their trading.
There is no common or standardized legal framework at the international level. In Iceland, for instance, trading of bitcoins is prohibited under the Icelandic Foreign Exchange Act. Regulation without prohibition is currently being sought in Europe. The European Commission (EC) is hoping to modify the Fourth Anti Money Laundering Directive, adopted in May 2015, to include cryptocurrencies.
The finance ministry said there have been some indications of what should be discussed at the upcoming G20 meeting of finance ministers in March.
"Given the moves seen in the United States, Germany and France, it's highly likely that the G20 meeting will be very focused on cryptocurrencies," said an official, adding the ministry has been in talks with authorities in the United States to develop systems to block attempts at money laundering using cryptocurrencies.
"There is a risk that virtual currencies could be used by terrorist organizations to circumvent the traditional financial system and conceal financial transactions, as trading can be carried out anonymously," the EC said.
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