이 기사는 2022년 03월 31일 08:07 thebell 에 표출된 기사입니다.

South Korea’s virtual asset payment services market is set to heat up, with KG Inicis dipping its toes into the market where Danal Fintech has been the only player.

KG Inicis recently announced that it will enter the virtual asset payment business. It established its wholly-owned subsidiary last month to carry out its new business. The country’s leading payment gateway (PG) company plans to receive a license for virtual asset services first and start providing the virtual asset payment services. It aims to utilize more than 170,000 affiliated stores nationwide to create synergies with diverse partner companies.

So far, Danal Fintech's Paycoin has been the only virtual asset payment platform in the South Korean market. Danal Fintech has issued cryptocurrency Paycoin (PCI) by establishing an overseas subsidiary Pay Protocol AG. If consumers make payments with Paycoin at online and offline affiliated stores, Danal Fintech later makes payment to the stores in cash.

With KG Inicis entering the market, competition among PG providers for virtual asset payment service is expected to heat up. Both KG Inicis and Danal Fintech plan to create virtual asset comprehensive management platforms beyond simple payment platforms.

Danal Fintech newly created financial investment department earlier this month and hired financial experts. The department will be in charge of expansion of Paycoin infrastructure. The biggest task is to establish a global payment infrastructure within this year. Danal Fintech aims to introduce a service that allows instant payment abroad using Paycoin. It is also preparing to set up Paycoin-based non-fungible token (NFT) market and virtual asset financial service Crypto Bank although specific launch date hasn’t been finalized yet.

KG Inicis plans to receive a license and expand its business into virtual asset deposit and custody business.

Clearing a regulation hurdle would be virtual asset payment service providers’ first step to pursue their business strategies. It remains to be seen whether the two companies will be able to get licenses for virtual asset services. Danal Fintech’s subsidiary Pay Protocol submitted its business registration in September 2021, but hasn’t received the license yet.

The main problem is that the local law doesn’t count payment as one of the official virtual asset service types. The Specific Financial Information Act classifies major virtual asset service providers into three categories: virtual asset trading service providers, virtual asset safekeeping and administration service providers and virtual asset digital wallet service providers.

Pay Protocol filed its registration as a wallet service operator, but it is said that the authorities were hesitant to make a decision because it doesn’t perfectly match the business type.

Another hurdle is the taxation on gains from crypto trading. The tax authorities will levy 20% tax on capital gains from virtual assets exceeding 2.5 million won (approximately $2,000) from 2023.

President-elect Yoon Suk-yeol pledged to offer tax exemption of up to 50 million won on virtual asset investment returns, but it will still be far from solving the real problem.

“Given that another type of virtual asset service has been created, a legal interpretation on the business seems necessary,” an industry source said. (Reporting by Yun-ju Roh)