South Korea's economy will be treading water. Photo: iStock

Lawmakers in South Korea are reportedly introducing a crypto-friendly bill that will promote trading and exchange development while the government is working on a blockchain platform for voters.

The bill proposes the establishment of a committee to promote and support crypto trading in addition to capital requirements, manpower and internal systems.

According to Bitcoin.com, which cited local media, lawmaker Kim Sun-dong announced he initiated the Digital Asset Trading Promotion Act last week which “includes a comprehensive plan for establishing a guideline for promoting the development of virtual currency exchanges and blockchain technology, tax reduction and exemption, measures against hacking damage and prevention of market disturbances.”

He emphasized that a new law was needed in favor of the industry to prevent blockchain startups and crypto companies leaving the country, as they have done in China. Using Bithumb as an example, which was recently sold to a Singapore consortium, Kim added that crypto transactions accounted for a large portion of stock transactions in the country earlier this year.

The bill makes the definition of what attributes ‘online money’ and encompasses other digital assets such as game items and crypto tokens. It adds that crypto exchanges must assume liability for hacks and loss of clients’ funds in addition to having more than 3 billion won ($US2.65 million) in capital to cover such losses.

Other industry-friendly points noted in the bill included the establishment of a digital asset trading committee, promotion of research and development projects, financial support, professional training and tax reduction.

South Korea is also developing a blockchain-based voting system, according to tech news outlet Zdnet. The Ministry of Science and ICT and the National Election Commission (NEC) stated that they will develop the system before the end of the year. It will increase transparency in the voting process by including an authenticated user system verifying the identification of voters in addition to providing users access to see their vote lodged and electoral progress.

The country’s leading blockchain company, Iconloop, has also been developing blockchain-based citizen ID systems and voting platforms, so it is likely the two are working together. Last month Icon demonstrated the new blockchain systems in addition to a cash-free payments system using QR codes.

Recently South Korea’s Internet and Security Agency (KISA) awarded its first information security management system (ISMS) license to a crypto exchange. Upbit was the recipient and became the pioneer, receiving the award for its strong infrastructure.

While China and India keep putting up walls for the crypto industry, South Korea continues to forge ahead.

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