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Choi Sang-mok, Deputy Prime Minister for Economy and Minister of Strategy and Finance, announced plans to improve regulations to prevent various illegal activities occurring during cross-border virtual asset transactions. This decision comes amid the need for regulation as the daily trading volume of stablecoins in South Korea reaches 300 billion won, with rampant tax evasion, money laundering, and other illicit activities.
On the 24th (local time), Choi held a press briefing in Washington D.C., USA, where he was attending the G20 Finance Ministers' Meeting.
Choi stated, "We will impose a prior registration obligation on virtual asset service providers handling cross-border virtual asset transactions and require them to report transaction details to authorities monthly." To this end, the goal is to complete the amendment of the Foreign Exchange Transactions Act in the first half of next year and officially implement it in the second half. The daily trading volume of stablecoins surged from 191.1 billion won last year to 300 billion won this year.
Once the amendment is enforced, 13 domestic virtual asset exchanges, including the big five?Upbit, Bithumb, Korbit, Coinone, and Gopax?will fall under the legal framework. These exchanges must report their transaction details to the Bank of Korea monthly to handle cross-border virtual asset transactions.
Choi pointed out, "Some trade transactions conducted with these coins are likely to be exploited as channels for corporate tax evasion through underpricing or false reporting, or used as money laundering routes for drugs and gambling." He added that the institutionalization of using virtual assets for trade and capital transactions will be discussed through the 'Virtual Asset Committee' led by the Financial Services Commission, which will be launched next month.
The government began its first domestic regulation on virtual assets by implementing the 'Act on the Protection of Virtual Asset Users' in July this year to protect investors.
Regarding the third-quarter domestic gross domestic product (GDP) growth rate announced that day, which fell short of expectations at 0.1%, he assessed, "The downside risk to the annual growth rate this year has increased."
He evaluated, "Domestic demand such as consumption and facility investment is recovering as expected, but construction performed worse than anticipated, and export growth also slowed more than expected. This seems to be due to temporary issues in the non-IT sector, such as the complete vehicle strike, along with a base effect in the IT sector." He added, "Regardless of the fourth-quarter figures, the annual growth is expected to exceed the potential growth rate level, so there is no need for major concern. What is important is the future trend."
When asked whether the lowered economic growth rate might affect next year's national tax revenue, he explained, "Since next year's revenue is largely determined by this year's corporate performance and real estate transaction volume, the uncertainty is not very high."
Regarding the 'export peak theory' suggesting that exports have reached their peak, Choi emphasized, "It is certain that uncertainty related to exports has increased, so we must respond with vigilance." On the Samsung Electronics crisis theory, he evaluated, "A crisis can also be an opportunity, so it has a dual aspect." He continued, "It is about reflecting the perspective and will to identify problems and make changes. We have historically leaped forward based on crises, and Samsung will do the same."
On the suggestion that governance improvement is necessary to resolve the 'Korea discount' (undervaluation of the Korean stock market), he said, "While there is consensus that governance improvement is important for Korean stocks to receive their proper value, there are differences of opinion among relevant ministries and legal experts regarding which laws to amend and the methodology, so discussions on related matters are ongoing."
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