Key Points
- South Korea’s National Tax Service plans to develop a system to monitor crypto transactions by 2025.
- The move coincides with Bitcoin’s surge to $70,000 and the approval of Bitcoin ETFs in the U.S.
South Korea’s National Tax Service is planning to create a new management system. This system aims to monitor cryptocurrency transactions and combat illegal activities. The goal is to have this system operational by 2025.
Development of a Virtual Asset Management System
The tax service has commenced initial consultations with a consulting firm to develop the “virtual asset integrated management system.” The system will analyze and manage data from crypto transactions under mandatory reporting regulations. The information source remains undisclosed.
The selected firm, GTIC, will be consulting on the system’s development for approximately four months. The plan is to issue proposals for system construction based on the consultation results. The objective is to launch the system by 2025. The initiative aims to address the need for regulatory measures due to the increasing volume of illegal crypto transactions.
Bitcoin’s Surge and the Need for Regulation
This initiative coincides with Bitcoin‘s recent rapid rise to $70,000, a first in its history. This surge has rekindled interest in cryptocurrencies. This interest has been particularly piqued following the approval of spot Bitcoin Exchange-Traded Funds (ETFs) in the U.S. earlier in January. This approval has stimulated increased investment and highlighted the need for taxation and monitoring of illegal transactions such as money laundering.
In March, discussions were reported within South Korea’s regulatory bodies, including the Financial Supervisory Service, about the approval of spot Bitcoin ETFs. While there is optimism around cryptocurrencies, the decision-making processes seem complex due to differing views within the regulatory community. There are also concerns about Bitcoin’s classification under current financial laws.
