Amid global major countries such as the United States, Japan, and Singapore recognizing the digital asset industry as a future growth engine and establishing a regulatory framework, South Korea remains trapped in a regulation-centered framework. There are concerns that it is stuck in a state of policy gaps and stagnation.
As of 10:50 a.m. on the 27th, Bitcoin recorded $108,371 on the virtual asset market tracking site CoinMarketCap. Bitcoin recently broke $110,000 due to the recent suspension of tariff policies by the Trump administration, but has slightly fallen and is moving sideways.
◇The U.S. is working on a spot ETF, while Japan is reforming digital asset taxation
Last year, the United States officially recognized the entry of the digital asset market into institutional finance by approving the Bitcoin spot ETF in January. This has led to a significant inflow of traditional funds such as pension funds and institutional investors into the digital asset market. Additionally, since the inauguration of Donald Trump's second administration on Jan. 20, the U.S.'s pro-digital asset stance has accelerated.
Immediately after taking office, President Trump signed an executive order on the digital asset reserve in March and established a dedicated position for virtual assets in the White House, appointing David Sacks, former Chief Operating Officer of PayPal, as the head. On the 6th, the state of New Hampshire became the first in the U.S. to pass a bill allowing the state government to hold digital assets like Bitcoin as strategic reserve assets.
Japan is also driving the digital asset industry by establishing a national-level Web3 project team. With the amendment of the Payment Services Act in June 2023, Japan has set up a regulatory framework allowing the issuance of stablecoins.
Japan is also reforming its digital asset taxation. The ruling Liberal Democratic Party recently proposed a tax reform plan that replaces the progressive tax rate, which was applied up to 55%, with a 20% capital gains tax for the blockchain industry regulatory environment. Additionally, the Financial Services Agency of Japan announced that by 2026 it would recognize digital assets as independent financial products rather than mere payment methods.
Singapore is establishing itself as a virtual asset hub. It operates a clear licensing system for digital asset businesses and provides tax incentives and infrastructure support for foreign corporations. The allowance of digital asset custody by private banks and the operation of a transaction testing ground for tokenized securities (STO) have been evaluated as innovations combining the capital market and digital technology. Hong Kong has also been busy creating a virtual asset hub at the national level, such as approving virtual asset spot ETFs by the Securities and Futures Commission (SFC) last year.
◇South Korea is hindered by regulatory ambiguity; digital asset issuance is also impossible
In contrast, South Korea is still stuck due to shadow regulation and legal ambiguity. Issuing digital assets is virtually impossible in South Korea. Not only can digital assets not be utilized as a means of fundraising, but there is also a lack of legal status for new types of assets such as stablecoins, NFTs, and security tokens (STO).
Industry experts have pointed out that the existing fragmented regulations, such as the Specific Financial Information Act and the Protection Act for Users of Virtual Assets, are insufficient to cultivate the market and develop the ecosystem. Most of the related laws have been designed for post-control or accident prevention, creating factors that stifle technological innovation and corporate activities.
Such regulatory gaps lead to a weakening of global competitiveness. Many of South Korea's major blockchain projects have transferred overseas to places like Singapore and Dubai, and domestic corporations are increasingly raising funds and acquiring licenses abroad. This poses significant opportunity losses at the national level and raises warnings that South Korea may be excluded from future reorganization of the global digital asset order.
Experts agree that now is the time for South Korea to establish a turning point to secure global competitiveness in the digital asset market. They argue that it is necessary to move away from the outdated practice of merely repeating post-regulation and design policies that reflect the essence and flow of the industry.
In particular, clarity and predictability in tax standards, as well as tax policies reflecting the realities of the market, can be key conditions for attracting global investors and expanding the domestic project ecosystem. Analysts indicate that if South Korea does not boldly reform the regulations that hinder innovation, it could permanently lose its leadership in digital financial innovation.