South Korea has continued its progressive stance towards cryptocurrency and the innovation it offers for fintech by providing tax incentives for blockchain development.
Despite the crypto markets entering into their twelfth month of a bear cycle, with the price of Bitcoin slipping below $4000 after making a rally to start 2019, the South Korean government has quietly added blockchain to the list of research and development fields that can qualify for a tax credit. The move is an attempt to boost interest in the space of blockchain, while mining the field for the potential innovation it could provide for financial technology, banking and improved economic practices.
According to a report published on Jan. 8, the local Ministry of Strategy and Finance has announced the updated tax law, which will go into effect this coming February. The news follows on a similar report covered by EWN earlier in the week, which saw the city of New York open its first Blockchain Center for research and development–with the support of a $100,000 injection by the local government–despite the otherwise declining state of the industry.
While 2017 may have witnessed “blockchain” become one of the more overused terms in business and financial circles, with some companies going so far as to change their name to reflect the technology (and a subsequent boost in stock price), the phrase fell out of vogue through 2018’s crashing coin prices. Instead, companies haves switched gears for the more technical “distributed ledger technology” to avoid the associations with the negative price movement of crypto, while still taking advantage of the innovative technology.
From computing giant IBM to social media behemoth Facebook, companies in numerous sectors have found ways to implement blockchain and blockchain development, with the latter creating a division to capitalize on the technology. Even with the connotations of cryptocurrency, as the primary underlying technology to most tokens, blockchain has found a resurgence in the bear market as more investors appreciate the breadth of what can be accomplished. Countries like South Korea, with their progressive approach to supporting innovation through technology, have found ways to encourage growth in the space as opposed to pursuing restrictive policies geared towards cryptocurrency.
New York, in particular, has been mindful of the impact both cryptocurrency and blockchain could have upon Wall Street and their banking empire, and has tread carefully on regulating the industry to the point of suffocation. Even with coin prices looking to continue their bear trend for the foreseeable future, crypto investors have largely been heartened by the growth in recognition for tokens and blockchain. The price movements that characterized the bull run to end 2017, when crypto market capitalization ballooned to nearly $1 trillion, appear to be an anomaly in retrospect, at least given the relative influence of the industry. Instead, the focus has shifted to growing the technology organically, with adoption for Bitcoin and blockchain being less about revolutionary change than incremental improvement.
Given the fall in BTC price below $4000, the industry is waiting on shaky ground for what 2019 will bring.