South Korea’s SMEs and Startups Department announced Wednesday that it plans to lift restrictions to prevent crypto-related businesses from being eligible as venture capital firms.
Currently, companies operating in the “virtual assets” sector are excluded from the government’s risk classification, which limits their access to various tax breaks and financial support. Ministry explain The proposed amendment reflects the “perceptual shift” in the digital asset industry and the establishment of “legal and institutional safeguards” designed to protect users.
The news said: “The government is currently focusing on cultivating the digital asset industry,” and then Enforcement regulations last yearlegal protection for users has been in place. Therefore, it is “inappropriate” to limit the industry.
The ministry will accept public comment on the proposal by August 18. The final execution date has not been announced.
Related: 27% of Koreans aged 20-50 hold cryptocurrency, 70% have more investments: Report
Impact on the Korean crypto industry
The proposed changes will enable the cryptocurrency business to qualify as a risky company. In addition, existing venture capital firms will be able to expand into the digital asset space without losing classification.
“This is expected to revitalize and expand the risk ecosystem and support the growth of the virtual asset industry.”
Qualifications considered “risk” allow Korean companies to obtain a range of government benefits. them include Cut five years of corporate income tax by 50%, one 75% Commercial real estate acquisition tax cuts and broadcast advertising discounts most 70%.
Related: Bank of Korea plans to win the launch of Pegged Stablecoin in 2026
South Korea’s bet on cryptocurrency
The proposed changes follow the growing trend of South Korea’s crypto-friendly policies.
On Sunday, South Korea’s bank notified commercial banks to participate in its Central Bank Digital Currency (CBDC) pilots, temporarily suspending the trial. A senior official at a bank told local media that pauses are intended to give the government time to go Clarify its stability policy And how CBDC can adapt to the broader digital finance ecosystem.
Newly elected President Lee Jae-Myung runs Cryptocurrency List. This includes issuing stablecoins pegged to local fiat currencies.
On Tuesday, Cointelegraph reported stocks of Kakao Bank, Kookmin Bank and Korea Industrial Bank 10% increase to 19% after Stablecoin trademark applicationindicating that investors’ confidence in the country’s crypto direction is growing.
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