Authorities promote Thailand as crypto hub through five-year tax break

Korea's Democratic Party of Korea (DPK) plans to re-request the Financial Services Commission (FSC) for an authoritative interpretation of spot Bitcoin ETFs in June, seeking the legal interpretation of such products, according to The Korea Economic Daily.  The FSC currently does not classify virtual assets as financial investment products, as they do not function as underlying assets for ETFs as stipulated by the Capital Market Act. Thus, the issuance and listing of spot cryptocurrency ETFs have not been permitted in the country, limiting trading opportunities for Korean investors. Photo by Pixabay on PexelsDespite the situation, interest around the spot Bitcoin ETFs has surged in South Korea following the approval of such ETFs in the United States and recently in Hong Kong. This heightened expectation of spot Bitcoin ETF approval has coincided with the 22nd general election held on April 10.  DPK’s attempts to keep its promise The DPK’s decision to seek clarification on spot Bitcoin ETFs from the financial regulator comes after the party’s landslide win at the general election, securing a total of 175 seats out of 300 in the National Assembly. Among the party’s key pledges were to allow the trade of spot BTC ETFs and ease regulations on crypto products.  In the run-up to the election, the DPK and the ruling People Power Party (PPP) vied for introducing pro-crypto pledges to win votes from young Koreans in their 20s and 30s, who make up a significant portion of crypto investors within the country.  Bold move to amend Capital Market ActThe spokesperson of the DPK said the party will first seek an authoritative interpretation regarding spot Bitcoin ETFs from the FSC and continue to closely monitor how the situation unfolds. The prevailing view from experts, however, is that the agency is likely to remain sturdy in its view.  If the FSC insists on its current stance on spot BTC ETFs, the party would go as far as to amend the Capital Market Act, the spokesperson said, which would take at least a number of months to follow all due processes. 

South Korean authorities will require homebuyers to disclose funds originating from cryptocurrency sales, a move aimed at increasing transparency in the nation's tight real estate market. The new rule is part of a wider government effort to address housing affordability, which is particularly pronounced in Seoul, and to integrate digital assets into its regulatory framework. The change, announced on Sept. 7 as part of new housing supply measures, will alter the mandatory funding plan submitted during property transactions. Proceeds from digital assets will be listed as a distinct category, similar to funds from stocks or bonds. Officials are also expanding loan disclosure requirements to include business loans and overseas borrowing, closing potential financing loopholes.Photo by Traxer on UnsplashImpact of asset volatility on property valuesThe policy follows growing evidence that volatility in assets like cryptocurrency can spill over into the property market. A 2024 study cited by Maeil Business Newspaper highlighted that both the COVID-era stock rally and Bitcoin's 2023 price surge had a discernible impact on housing values. According to Yu Jung-suk, a professor at Dankook University, apartments in Seoul's affluent Gangnam district are particularly sensitive to fluctuations in Bitcoin and the KOSDAQ index. He noted that high-profile property acquisitions by young crypto investors, even if few in number, can significantly sway market sentiment. Professor Yu suggested that regulators may need more comprehensive tools to manage the risks connecting different asset classes. The government's new measures also seek to cool the capital's housing market, where prices have continued to rise despite a slowdown in growth. In contrast, prices in areas outside Seoul have been declining since 2022. To address the supply-demand imbalance, officials plan to begin construction of 1.35 million new homes in the Seoul metropolitan area between 2026 and 2030. Stablecoin regulation and CBDC trials advanceBeyond real estate, officials are developing a formal regulatory structure for stablecoins. The Presidential Commission on Policy Planning is reportedly considering a model where a consortium of banks and fintech firms would be granted rights to issue a won-pegged stablecoin. Supervision for this new system would fall to a proposed Financial Stability Council, a body intended to serve as a central coordinator for financial policy, comprising the finance ministry, the Bank of Korea, and other regulators. The initiative aims to combine the stability of the traditional banking sector with the innovation of non-bank financial companies. The evolving regulatory environment is attracting attention from global industry leaders. Executives from Tether, the issuer of the USDT stablecoin, met with Shinhan Financial Group CEO Jin Ok-dong in Seoul on Sept. 8. While Tether representatives stated they were monitoring the regulatory climate, they confirmed no specific business plans were discussed. Separately, the Bank of Korea is moving forward with digital currency experiments. In partnership with government agencies and six major commercial banks, the central bank will launch a pilot program to test the use of a digital currency for distributing state subsidies and vouchers. 

Laos Halts Crypto Miners’ Electricity Amid Drought and DebtsLaos, a leading producer and exporter of hydroelectricity, has made the decision to suspend electricity supply to cryptocurrency mining operations within its borders.Photo by Ioana Farcas on UnsplashTackling a perfect stormThe decision comes as a result of a perfect storm of challenges, including a struggle to meet escalating power demands due to drought conditions, impending commitments to export electricity to Thailand, and the mounting debts of cryptocurrency mining companies.In a calculated move in 2021, Laos initiated a public-private pilot program aimed at delving into cryptocurrency mining and trading. The context for this move was China’s sweeping crackdown on mining activities, compelling miners to scout for alternative jurisdictions for their operations.In response, Laos granted authorization to a handful of entities, spanning construction conglomerates and a bank, to partake in the mining and trading of Bitcoin, Ethereum, and Litecoin. This led to a commitment to regulatory collaboration between government ministries, the Bank of Laos, and Electricité du Laos (EDL).Exploiting hydropowerLaos’ abundant and affordable electricity has placed it on the short list of locations for crypto miners to settle in. With an abundance of rivers and waterfalls, hydropower stands as one of the nation’s primary energy sources, offering a renewable source of cost-effective electricity.However, events in 2023 have disrupted that narrative. A persistent drought has hit the country during the first half of the year, which triggered an unprecedented surge in the demand for electricity from sources other than hydro.The dependence on hydropower, constituting 95% of the nation’s energy generation, struggled to keep pace with the demand. As a direct consequence, EDL, a state-owned electricity distributor, announced the cessation of electricity supply to crypto mining operations.The problem has compounded as Laos finds itself committed to exporting substantial quantities of electricity to the Electricity Generating Authority of Thailand (EGET), serving as a lifeline for Thailand’s power grid during the forthcoming dry season. This external commitment has, in turn, further strained the local capacity for electricity supply.Another Asian country, Bhutan, has also gotten involved with crypto mining in an effort to exploit its hydropower resources, where 99% of electricity supply comes from hydropower within the kingdom.Unpaid billsAnother dimension to the saga is the growing debt crisis faced by cryptocurrency mining operations. A representative of EDL cited the inability of these mining businesses to settle their accumulating electricity bills as a key factor in the decision for suspension. The Bank of Laos has further escalated matters by deciding to halt loans to cryptocurrency companies in January.Laos has had bold objectives to transform itself into Southeast Asia’s premier exporter of clean electricity. The nation’s topography, featuring mountainous terrain covering 70% of the country, has immense potential for hydropower, with over 26,000 megawatts of installed capacity and ambitious plans to double this figure.Hydroelectric dams like Nam Theun 2 have become conduits for substantial volumes of low-cost electricity, primarily directed towards neighboring Thailand and Vietnam. Meanwhile, projects like the Luang Prabang dam, boasting an installed capacity of 1,460 megawatts, underscore the country’s ambitions to develop hydropower further.Revenues from power exports have become a vital component in Laos’ gross domestic product (GDP), contributing almost 15%, as per a report from October 2022.