South Korean Blockchain Association Desires a Standalone Crypto City



Last Updated: December 26, 2018 at 9:09 AM EST
Gwangju South korea blockchain association

The blockchain association of South Korea is in need of a ‘specialized Crypto-Valley District,’ which it intends to get from the city of Gwangju.

This crypto valley is expected to come from the sixth largest city in South Korea, which happens to be Gwangju. To further make the idea more appealing, the Korea Blockchain Enterprise Promotion Association (KBEPA) has stated that the crypto city hub will be an instrument of job creation. Therefore, the blockchain body has set plans in motion to achieve its dream by going into partnership with Universal Group. The next step is to seek to be granted an audience with Lee Yong-Sub, the mayor of Gwangju, as well as other politicians in the city:

“We plan to meet Mayor Lee officially to deliver the recommended plans to announce and transform Gwangju into a special governing city for cryptocurrency. We also plan to meet the councilperson Kim Dong-Chan to ask for support.”

The government of South Korea, though not against cryptocurrency, still believes in the use of the manufacturing sector to solve the problem of unemployment in the country. However, the blockchain group has a different idea; the group is convinced that the creation of a crypto-valley district in Gwangju will result in massive job creation to the tune of 1 million jobs.

Leaders in the Blockchain Industry

An example of countries that have benefited massively from identifying with the blockchain technology was given by Kim In-Ki, Universal Group’s chief executive, and they include Malta and Estonia:

“Estonia and Malta have been the forerunners of the 4th industrial revolution by successfully attracting global blockchain corporations to invest in their cities, and they have enjoyed astronomical rises in the number of jobs created. Our government has attempted to create new jobs by myopically focusing on the manufacturing — auto or shipbuilding — industry, overlooking the rise of 4th industrial revolution.”

Furthermore, the blockchain group faulted the South Korean government in what it described as unfair regulations to cryptocurrency and blockchain companies, which has forced some local companies to establish exchanges in foreign countries.

No Tax Breaks Allowed

As KBEPA expressed displeasure in the South Korean government, it made mention of certain unfair actions the government had taken with regards to cryptocurrency and one of them could be the recent move taken by the government to exclude startups in the cryptocurrency and blockchain sector from being classified as venture firms and this automatically means that such companies will not enjoy tax breaks.

The government, at the time, revealed that the effect of the decision would be immediate on blockchain and cryptocurrency firms being established after the announcement. Then as for the startups already in place, the title of venture firms will no longer apply to it, and this will take effect in the latter part of 2018.

In specific terms, the action taken by the government will cost crypto and blockchain startups a 75% acquisition tax reduction. Also, there is a high chance that crypto exchanges will lose credit guarantees and will also be required to pay double in income and cooperate taxes. Some country based crypto exchanges that the move will affect include major exchanges like Upbit and Bithumb.