Most of the nations out there are trying to protect the economy by adding the regulation in the banking, cash and digital cash. This also includes the crypto. However considering the blockchain and the crypto being volatile with the tech changes, many nations are using the approach of taxation first. USA, India, UK have done the steps towards the taxation first and regulation as a part of ongoing changes.
South Korea recently took the different turn, they are focusing on the regulation first. They are cleaning up all the exits first and adding the regulation on a lot of small things before they can introduce the taxation. So in this post I want to put up a light on if this is a good approach.
Stablecoins on Radar
Japan has already addressed the stablecoin issue by making the external stablecoins on blockchain as an illegal asset. Instead they only allow the forex pairs of nation as a stable coins. So that means the similar move is likely happen with the South Korea. In a way such type of regulation is a good thing. You are not going to find rug pulls or manipulation through the international pairs the same way you do with crypto.
The thing about the stablecoins which are independent of the govt is that they often are being used as a manipulator scenario. And in that context I'd say that stablecoin needs to be properly thought about with investment in the SK. Because if anyone tries to do something and legally that could cause issues on the taxation side.
Regulations on Rug Pull Tokens
Many blockchain projects are adding the tokens of their own. And they can run away after finding the funds into their token. A lot of people have done that which can be alarming. And so there is going to be regulation on that front. Which is a bad news for the decentralization but for centralization that means things would be more simplified.
I feel a lot of Binance and Ethereum tokens are going to be drawn under. You are going to find a lot of nations are going to crackdown on those type of the tokens. I think regulating the rug pull tokens which are often the talk on the twitter and the discords is something people would want eventually. For now let's see what SK does in this context.
Finally, I'd say that South Korea is taking cautious approach. I suppose they want to pay off most of their debts using the crypto. And that would give them edge off the economical issues. Once that part is settled they can consider the regulation and taxation in order. But that would happen in a gradual manner till the year 2025.
What's your take on this? Do you think South Korea is in right direction?
