Seoul may tax trades in virtual currencies

SEOUL • South Korea said yesterday it may tax capital gains from cryptocurrency trading as global regulators worried about a bubble, with Australia's central bank chief warning of a "speculative mania" that has seen the digital asset making rip-roaring gains.

As bitcoin futures made their world debut on a US stock exchange this week, policymakers have been forced to contend with cryptocurrencies becoming more of a mainstream play and the need to regulate them.

The world's biggest and best known cryptocurrency, bitcoin, surged past US$17,000 (S$23,000) to new all-time highs this week, marking an almost dizzying 20-fold rise this year and feeding fears of a bubble.

Australia's central bank governor Philip Lowe warned yesterday the fascination with the assets felt like a "speculative mania". The comments came days after his New Zealand counterpart cast doubt on its future.

The chairman of the US Securities and Exchange Commission on Monday warned trading and public offerings in the emerging asset class may be in violation of federal securities law.

The possibility of major losses and wild gyrations of 10 per cent to 30 per cent in a single day have instilled a sense of urgency among policymakers to come up with a regulatory response.

In Seoul, after an emergency meeting yesterday, South Korea's government said it will consider taxing capital gains from trading of virtual coins and will also ban minors from opening accounts on exchanges, according to a statement obtained by Reuters. Seoul will maintain a current ban on all financial institutions dealing in virtual currencies.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 14, 2017, with the headline 'Seoul may tax trades in virtual currencies'. Print Edition | Subscribe