The South Korean government has made a significant decision to lift a decades-long ban on recognizing cryptocurrency companies as venture firms, paving the way for these businesses to access government subsidies and support.
The Ministry of SMEs and Startups has approved a revision of the Venture Business Act, which will allow crypto companies to apply for venture certification from September 16. This move marks a significant shift in the country’s attitude towards digital assets, as it acknowledges the potential of cryptocurrencies to drive innovation and attract global capital.
Background and Context
Since 2018, cryptocurrency companies in South Korea have been excluded from the benefits of traditional venture companies due to concerns about the speculative nature of the market. However, with the election of President Lee Jae-Myung in June, the administration has prioritized digital financial reforms and driven legislation to support innovations such as stable coins.
The decision to revise the Venture Business Act was first indicated in July, less than a month after Lee’s election. According to the supervisory authorities, companies that qualify as venture firms are entitled to government subsidies such as tax cuts and financial support, which will now be available to crypto companies.
Implications and Benefits
The revision of the Venture Business Act is expected to position South Korea as an attractive hub for digital asset innovation, with the crypto market expected to grow to $1.3 billion by 2026. The supervisory authorities hope that crypto companies will take advantage of the new venture status to access government support and drive growth in the industry.
“This regulatory reform is intended to align Korea with the global trends in digital assets and secure future growth engines,” said Han Seong-Sook, the South Korean Minister of SMEs and Startups. “We will concentrate our policy efforts to promote a transparent and responsible ecosystem that flows smoothly and supports the growth of new industries.”
While promoting cryptocurrency innovation, the South Korean government remains committed to protecting investors. In recent months, the country has increased efforts to curb speculative crypto trading, including revising the regulatory framework for crypto credits and restricting annual interest rates to 20%.
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