Korbit "46 Trillion Won Economic Effect if Domestic Corporations Allowed to Invest in Coins"

[Asia Economy Reporter Lee Jung-yoon] An analysis has emerged suggesting that allowing domestic corporations to invest in cryptocurrencies could generate an economic value of 46 trillion won.

Korbit Research Center, under the cryptocurrency exchange Korbit, announced on the 17th that it published a report analyzing four positive effects if domestic corporations are permitted to invest in virtual assets. The report analyzed four positive effects expected when domestic corporations can invest in virtual assets in the future: ▲economic value creation ▲employment increase ▲strengthening investor protection ▲solving the National Pension Fund depletion issue.

Korbit Research Center projected that if domestic corporations participate in the cryptocurrency market, an economic value of 46 trillion won would be created. Citing a report by global consulting firm PwC, it estimated that if cryptocurrencies are actively adopted, the global gross domestic product (GDP) in 2030 will increase by $1.931 trillion compared to 2021. Assuming South Korea maintains its 1.7% share of the global GDP, the domestic GDP would increase by about $33 billion (approximately 46 trillion won).

In terms of employment, it is expected to contribute to an increase of about 150,000 jobs by 2030. On an annual average basis, this corresponds to an increase of 19,000 jobs, which is 5% of the 370,000 new domestic employees at the end of 2021.

Regarding investor protection, if corporations enter the cryptocurrency sector, their ability to interpret information from virtual asset project teams will improve, contributing to the creation of a sound coin market. Additionally, it is seen as a positive effect of corporate participation in virtual asset investment that the National Pension Fund could invest in virtual assets to improve pension returns and delay the depletion point.

Korbit Research Center explained that if the government needs to intervene in corporate cryptocurrency investments, it is preferable to create a sound investment environment through measures such as mandatory education to enable corporations to hold assets within set limits or develop risk management capabilities themselves, rather than completely blocking investments.

Jung Seok-moon, head of Korbit Research Center, said, "If domestic companies are late in entering the rapidly growing virtual asset market, it is like missing opportunities in the past when domestic companies had to enter and grow in export markets but could not support foreign exchange operations." He added, "We need to consider whether completely blocking corporate virtual asset investments is truly in the public interest."

Currently, major advanced countries except South Korea are known to treat individuals and corporations equally in cryptocurrency transactions. Major exchanges such as Coinbase, Kraken, and Bitstamp create omnibus accounts (a single integrated account that can handle customer fund transfers) at banks collaborating with the exchange and support cash deposits and withdrawals for all customers. They conduct their own Know Your Customer (KYC) procedures and share the results with the banks, but it is rare for banks to directly control individual exchange customers. Overseas, corporations can acquire and liquidate cryptocurrencies on the same terms as individuals.

In contrast, under the Act on Reporting and Using Specified Financial Transaction Information (Special Financial Transactions Act) implemented last year in South Korea, both individual and corporate customers must complete exchange customer verification and real-name account authentication with cooperating banks. Although the Special Financial Transactions Act does not restrict corporate use of exchanges, domestic banks do not issue real-name accounts for corporations to use exchanges. Korbit Research Center stated, "Due to these restrictions, domestic companies interested in virtual assets are using branches already established overseas or creating separate local corporations. To prevent economic effects from leaking overseas, corporations should be allowed to enter the virtual asset market."