South Korea’s blockchain association intends to lobby the authorities in the city of Gwangju to turn the urban area into a ‘specialized Crypto-Valley District.’
According to the Korea Blockchain Enterprise Promotion Association (KBEPA), turning South Korea’s sixth-largest city into a cryptocurrency hub will create numerous jobs. To achieve this the blockchain body, which was founded in July this year, in partnership with Universal Group is seeking an audience with the mayor of Gwangju, Lee Yong-Sub, and other city politicians:
We plan to meet Mayor Lee officially to deliver the recommended plans to announce and transform Gwangju into a special governing city for cryptocurrency. We also plan to meet the councilperson Kim Dong-Chan to ask for support.
Per the blockchain lobby group, the South Korean government has been concentrating on the manufacturing sector for job creation and ignoring the ‘rise of the 4th industrial revolution’. By making Gwangju a crypto-valley district, one million new jobs would be created in the city.
The chief executive of Universal Group, Kim In-Ki, gave the example of Estonia and Malta which have both benefitted from their early embrace of blockchain technology:
Estonia and Malta have been the forerunners of the 4th industrial revolution by successfully attracting global blockchain corporations to invest in their cities, and they have enjoyed astronomical rises in the number of jobs created. Our government has attempted to create new jobs by myopically focusing on the manufacturing — auto or shipbuilding — industry, overlooking the rise of 4th industrial revolution.
Additionally, the blockchain body also criticized the South Korean government’s stance towards blockchain and cryptocurrency firms pointing out for instance that unfriendly regulations were forcing some domestic firms to open exchanges abroad.
‘Not Venture Firms Anymore’
Some of the unfriendly stances that KBEPA could have been alluding to include a move by the South Korean government less than three months to exclude startups in the blockchain and cryptocurrency sector from being categorized as venture firms thereby denying them incentives such as tax breaks.
South Korea Rejects Crypto Exchanges as Venture Firms, Taxes to Double https://t.co/Uhg5GC3T96
— CCN (@CryptoCoinsNews) October 3, 2018
At the time, the government indicated that the decision would immediately affect crypto and blockchain firms being set up after the announcement. Existing startups would be decategorized as venture firms in late 2018.
Specifically, the move stood to deny blockchain and cryptocurrency startups a 75% reduction in acquisition taxes. Additionally, the corporate and income taxes paid by cryptocurrency exchanges stood to double while these firms would also lose credit guarantees. Among the firms that were set to be affected by the move include the major cryptocurrency exchanges based in the country such as Bithumb and Upbit.