Introduction
Amidst a national surge in crypto trading, the South Korean Financial Services Commission (FSC) is proposing a significant change to their credit finance laws. This change could potentially bar citizens from using credit cards in cryptocurrency transactions. The FSC aims to tighten regulations on the local cryptocurrency market and address concerns about money laundering and speculative behavior.
The Proposed Amendment
The FSC is considering an amendment to its credit finance act that would ban the use of credit cards for purchasing cryptocurrencies. The purpose of this move is to curb the illegal outflow of domestic funds and speculative activities associated with buying crypto on foreign exchanges. The proposed change seeks to align the treatment of virtual assets with other prohibited payment methods, ultimately enhancing the transparency and security of crypto transactions.
Background
South Korea has been experiencing a surge in crypto trading, with two Korean exchanges, Upbit and Bithumb, contributing over 10% to the global trading volumes. While domestic exchanges in South Korea are subjected to strict regulations and partnerships with local banks, foreign exchanges do not face the same level of scrutiny. This discrepancy in regulations poses risks and calls for tighter control over the local cryptocurrency market.
Impact on South Korean Citizens
If the proposed amendment is passed, South Korean citizens will be prohibited from using credit cards to purchase cryptocurrencies. This effectively limits their access to virtual assets via foreign platforms. The move is likely connected to the revelation that South Koreans held over $98 billion worth of crypto holdings in overseas accounts in 2023. By restricting credit card usage, the FSC aims to reduce risks and prevent the illegal outflow of domestic funds.
Global Trend of Regulatory Bodies
This proposal reflects the global trend of regulatory bodies seeking to establish a more controlled and secure cryptocurrency environment. As crypto continues to gain attention, governments and financial institutions worldwide are implementing stricter regulations. The decision on the proposed amendment is expected to be reviewed and potentially implemented in the first half of 2024.
Conclusion
The South Korean Financial Services Commission's proposed amendment to ban credit card usage in cryptocurrency transactions is part of a broader effort to tighten regulations on the local crypto market. The aim is to curb illegal outflows of funds and address concerns about money laundering and speculative behavior. If passed, this amendment would restrict South Korean citizens' access to virtual assets via foreign platforms. As the global trend of regulatory bodies seeking more control over cryptocurrencies continues, it will be interesting to see how these proposed changes impact the crypto landscape.
What are your thoughts on the potential impact of this credit card ban on people's ability to acquire cryptocurrencies? Share your opinions in the comments section below.
Frequently Asked Questions
Is buying gold a good option for retirement planning?
Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.
Physical bullion bars are the most popular way to invest in gold. You can also invest in gold in other ways. It is best to research all options and make informed decisions based on your goals.
If you don’t have the funds to invest in safe places, such as a safe deposit box or mining equipment companies, buying shares of these companies might be a better investment. If you are looking for cash flow from your investment, buying gold stocks will work well.
You can also put your money in exchange traded funds (ETFs). These funds allow you to be exposed to the price and value of gold by holding gold related securities. These ETFs can include stocks of precious metals refiners and gold miners.
Can I buy or sell gold from my self-directed IRA
Although you can buy gold using your self-directed IRA account, you will need to open an account at a brokerage like TD Ameritrade. If you already have a retirement account, funds can be transferred to it.
The IRS allows individuals to contribute up to $5,500 annually ($6,500 if married and filing jointly) to a traditional IRA. Individuals are allowed to contribute $1,000 each ($2,000 if married or filing jointly) to a Roth IRA.
If you do decide you want to invest your money in gold, you should look into purchasing physical bullion instead of futures contracts. Futures contracts, which are financial instruments based upon the price of gold, are financial instruments. These financial instruments allow you to speculate about future prices without actually owning the metal. But physical bullion refers to real gold and silver bars you can carry in your hand.
What amount should I invest in my Roth IRA?
Roth IRAs let you save tax on retirement by allowing you to deposit your own money. You cannot withdraw funds from these accounts until you reach 59 1/2. However, if your goal is to withdraw funds before that time, there are certain rules you must observe. First, you cannot touch your principal (the original amount deposited). This means that you can't take out more money than you originally contributed. You must pay taxes on the difference if you want to take out more than what you initially contributed.
The second rule says that you cannot withdraw your earnings without paying income tax. When you withdraw, you will have to pay income tax. Consider, for instance, that you contribute $5,000 per year to your Roth IRA. Let's say you earn $10,000 each year after contributing. This would mean that you would have to pay $3,500 in federal income tax. That leaves you with only $6,500 left. The amount you can withdraw is limited to the original contribution.
You would still owe tax on $1,500 if you took out $4,000 of your earnings. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). Even though you had $7,000 in your Roth IRA account, you only received $4,000.
There are two types if Roth IRAs, Roth and Traditional. Traditional IRAs allow for pre-tax deductions from your taxable earnings. You can withdraw your contributions plus interest from your traditional IRA when you retire. There is no limit on how much you can withdraw from a traditional IRA.
Roth IRAs won't let you deduct your contributions. Once you are retired, however, you may withdraw all of your contributions plus accrued interest. There is no minimum withdrawal limit, unlike traditional IRAs. You don't have to wait until you turn 70 1/2 years old before withdrawing your contribution.
How much gold do you need in your portfolio?
The amount of money you need to make depends on how much capital you are looking for. Start small with $5k-10k. You could then rent out desks and office space as your business grows. So you don't have all the hassle of paying rent. It's only one monthly payment.
Consider what type of business your company will be running. In my case, we charge clients between $1000-2000/month, depending on what they order. This is why you should consider what you expect from each client if you're doing this kind of thing.
Because freelance work pays freelancers, you won't likely get a monthly income if you do freelance work. Therefore, you might only get paid one time every six months.
So you need to decide what kind of income you want to generate before you know how much gold you will need.
I recommend starting with $1k-$2k of gold and growing from there.
Statistics
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
External Links
finance.yahoo.com
irs.gov
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- Do you want to keep your IRA gold at home? It's not legal – WSJ
law.cornell.edu
- 7 U.S. Code SS7 – Designation board of trade as contract marketplaces
- 26 U.S. Code SS 408 – Individual retirement accounts
How To
The History of Gold as an Asset
From the beginning of history, gold was a popular currency. It was popular because of its purity, divisibility. uniformity. scarcity and beauty. It was also traded internationally due to its high value. However, since there were no international standards for measuring gold at this point, different weights and measures existed worldwide. One pound sterling, for example, was equivalent in England to 24 carats, and one livre tournois, in France, to 25 carats. A mark, on the other hand, was equivalent in Germany to 28 carats.
In the 1860s the United States began issuing American currency made up 90% copper (10% zinc) and 0.942 gold (0.942 pure). This led to a decline in demand for foreign currencies, which caused their price to increase. The United States began minting large quantities gold coins at this time, which led to a drop in the price. Due to the excessive amount of money flowing into the United States, they had to find a way for them to repay some of their debt. They sold some of their excess gold to Europe to pay off the debt.
Most European countries distrusted the U.S. Dollar and began to accept gold as payment. Many European countries began to use paper money and stopped accepting gold as payment after World War I. The value of gold has significantly increased since then. Although the price of gold fluctuates today, it remains one of your most safe investments.
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By: David Sencil
Title: South Korea Aims to Tighten Crypto Regulations with Proposed Credit Card Ban
Sourced From: news.bitcoin.com/south-korea-proposes-ban-on-credit-card-crypto-purchases/
Published Date: Tue, 09 Jan 2024 08:00:59 +0000
