Korea crypto tax pause called for; TikTok jumps into NFTs

Transcript

Want to know where one of the fastest-growing Crypto hotspots are in the world? Here’s a clue.

Welcome to The Daily Forkast, October 5, 2021. I’m Angie Lau, Editor-in-Chief of Forkast.News, covering all things blockchain.

With massive uptake of play-to-earn games like Axie Infinity and excitement over decentralized finance, it should come as no surprise to find that central and southern Asia is leading innovation and adoption.

We’re going to take a dive into what’s driving that growth and a whole lot more. Let’s get you up to speed from Asia to the world.

First up, research by global blockchain analytics company Chainalysis found 14% of the total value of global cryptocurrency transactions took place within central and southern Asia and Oceania in the year from July 2020 to June 2021.

With the growth of over 700% in raw value traded in that period, the region is the fourth largest cryptocurrency market in the world.

But there are a lot of factors at play. Forkast.News Lachlan Keller reports on why grassroots adoption is key to that growth.

A few countries have been vital, with the region currently holding the three top spots in Chainalysis Global Crypto Adoption Index: Vietnam, India, and Pakistan.

In the report, Binh Nguyen of the Royal Melbourne Institute of Technology said that while gambling is illegal in Vietnam, it’s still very popular, and that may explain why so many people are willing to invest in high volatility assets like cryptocurrency.

Lack of access to traditional banking services is also a possible reason. According to the World Bank, 190 million of the 1.4 billion people in India have no access to the financial system, while almost half of the population in Pakistan had no bank account in 2017.

The report says decentralized finance apps, or DApps, have had a huge impact, with transaction volumes now surpassing those of all other crypto service types.

However, one expert told Forkast.News, DeFi won’t be the biggest driver over the next few years.

“GameFi is going to drive the crypto adoption in Southeast Asia and South Asia. The blockchain games in the play-to-earn sector is what is going to take the adoption of non-crypto users and bring them into crypto users.”

GameFi has already exploded in the Philippines. 20% of crypto wallet MetaMask’s 10 million active monthly users live in the country, and it says growth there has been driven by the popularity of the NFT based game Axie Infinity.

For Forkast.News, I’m Lachlan Keller.

Meanwhile, over in South Korea, there’s a national petition going on calling for crypto taxes to be put on pause, pushed back, delayed.

Posted by an anonymous investor, the petition calls out Korea’s Finance Minister, saying his decisions are inconsiderate of the market and also inconsiderate of investors. Not mincing words there.

It’s part of the greater conversation happening in Korea right now about taxes. There, the National Assembly kicks off its annual review of the Ministry of Economy and Finance, where the topic of taxing virtual asset income is being discussed right now.

Forkast.News Danny Park reports.

Korea’s National Petition Board on the presidential Blue House web page allows people to bring attention to significant matters. When a petition reaches 200,000 signatures, the government is obliged to answer.

This petition asks for two things – an extension of the grace period before taxation on crypto income and fair taxation, saying the finance minister should prioritize investors and the industry.

Levies on virtual asset gains are due to begin on January 1, but investors argue that date should be pushed back, citing lack of investor protection measures.

Many also say it is unfair, with crypto gains above 2.5 billion won, or about US$2,100 taxed, while stock capital gains are taxed from 50 million won.

Hong Ki Yong, professor at Incheon National University told Forkast.News, that “Virtual assets are categorized as other income according to the International Financial Reporting Standards. However, there is little to no inherent difference between income from virtual and financial assets. Hence, the topic of tax deduction and other benefits may be considered in the future.”

Meanwhile, ahead of the National Assembly’s annual review. Finance Minister Hong Nam Ki said he will reinforce the ministry’s infrastructure on crypto income taxation to prevent tax evasion.

For Forkast.News, I’m Danny Park.

And finally, today, TikTok has jumped into the NFT market.

However, it chose to go kind of old school to do so. The China-based social media giant taking out a full-page black and white text ad in the New York Times.

Just last week, the social media platform announced that it has over one billion active monthly users worldwide.

It’s now leveraging content from some of its most popular creators to make a splash in the NFT world, with the first series from Lil Nas X set to drop on October 6.

And they’re getting their environmental credentials sorted out too. The NFTs will be available on a dedicated site supported by Immutable X, a layer two scaling solution for Ethereum. It states that transactions using it will be 100% carbon neutral.

In the ad, TikTok stated that it wants to be the platform that continues to quote find innovative ways to recognize and reward our creators.

Except maybe for those newspaper ads – newsprint not necessarily the most innovative way forward for the NFT world, but I hope that they were digital ads, at least.

And that’s The Daily Forkast from our vantage point right here in Asia. For more, visit Forkast.News.

And if you’re watching this on YouTube, you can support us in our journalists, the OG of content creators, hit that subscribe button and like, we always appreciate the time you spend with us.

I’m Forkast Editor-in-Chief Angie Lau. Until the next time.