Lee Kwang-jae, a member the ruling Democratic Party of South Korea, is said to be planning to accept campaign donations in digital assets. As a receipt for such donations, he plans to issue non-fungible tokens or NFTs starting in mid-January next.
Crypto as a Fuel for Political Campaigns
According to a December 30, report by The Korea Held the cryptocurrencies that will be included in the initiative are the two largest by market capitalization – Bitcoin and Ether (ETH), along with a few local tokens. Rep. Lee Kwangjae, if realized, will be the first Asian lawmaker to accept digital assets as campaign finance.
“We are currently reviewing a selection of local (virtual assets) wallet providers. Lee’s administration said that they will be reviewing our wallet address on their blog, Facebook page and YouTube channel in January.
The lawmaker’s office stated that it initially plans to receive 10,000,000 won (about $8,400 worth) of cryptocurrency. Each contributor is limited to 1 million won ($840).
Later, the donated assets will be converted into cash at a local venue for digital asset trading. They will then be used in accordance to political finance regulations.
Lee’s office warns that the real value of a donation may change when it is converted to fiat currencies due to increased volatility in the cryptocurrency market. This could lead to tax deduction amounts that are different from what people expected when they settled their tax year-end taxes.
The Controversial Taxation Strategy
Since the beginning of 2021, the East Asian government has sought to impose strict rules upon the local digital asset ecosystem. One of the measures was to slap those who make more than $42,000 through cryptocurrency trading, and to impose a 20% tax. The legislation was to take effect at the beginning of 2022.
The Democratic Party, however, proposed a delay in the taxation policy. The lawmakers claim that the nation doesn’t have a well-designed plan for implementing the taxing procedure.
The People Power Party, an opposition party, argued that the legislation should be delayed. Rep. Cho Myounghee, a member the opposition, stated that it was not right to impose taxes at a time when virtual currency’s legal definition is unclear.
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