SEOUL, Jan. 25 (Korea Bizwire) – South Korea is considering imposing taxes on virtual currency transactions as part of its efforts to curb excessively speculative investment in cryptocurrencies, the country’s top economic policymaker said Thursday.
“We are reviewing (taxation) because (cryptocurrency) is seen to be taxable,” Finance Minister Kim Dong-yeon told lawmakers. “We are looking at a variety of cases in other countries.”The finance minister also stressed that virtual currencies are not legal tender, adding that the government will roll out a set of measures to curb the “irrational” investment craze.
Kim said earlier a shutdown of virtual currency exchanges would be one of the government’s options.
Currently, financial authorities ban banks from offering virtual accounts, which are needed to sell or buy cryptocurrencies, to individual customers, the latest measure to help prevent speculative investment in virtual coins.
Opening anonymous cryptocurrency accounts is also banned until banks install a system that ensures only real-name bank accounts and matching accounts at cryptocurrency exchanges for deposits and withdrawals.
Banks are expected to introduce the system, which will require cryptocurrency exchanges to share users’ transactiondata with banks, late this month or early next month.
As a tax enforcement measure for cryptocurrency investors, the government can access users’ transaction data via banks, the country’s financial regulator previously said.
South Korea’s financial authorities have been stepping up monitoring of cryptocurrency transactions amid concerns that a bubble may be set to burst.
Cryptocurrencies, such as bitcoin and ethereum, have rapidly gained popularity in recent years among South Korean investors hoping to make quick money.
South Korea is home to one of the world’s biggest private bitcoin exchanges, with millions of people estimated to own some of the best-known digital currency.
Despite a boom in cryptocurrency transactions, the exchanges go largely unregulated in South Korea as they are not recognized as financial products, with no rules in the country to protect virtual currency investors.