Key Takeaways:
- Mass-produced, divisible NFTs used for payments will be regulated like cryptocurrencies in South Korea.
- NFTs with minimal value, such as those for ticketing or digital certificates, will be classified as general NFTs and treated differently.
- NFTs may be classified as securities under the Capital Markets Act and can earn interest when deposited on crypto exchanges, except for regular NFTs and CBDCs.
South Korea’s Financial Services Commission (FSC) has issued new guidelines defining when nonfungible tokens (NFTs) can be considered virtual assets.
Mass-produced, divisible NFTs that can be used for payments will be regulated similarly to cryptocurrencies.
South Korea to treat certain NFTs as regular crypto, new rulebook says: report https://t.co/H5dWBxy25N
— The Block (@TheBlock__) June 10, 2024
In contrast, NFTs with little to no value, such as those used for ticketing or digital certificates, will be classified as general NFTs and treated differently.
The FSC’s Jeon Yo-seop highlighted that large NFT collections could likely be used as payment methods due to their transaction volume.
SOUTH KOREA TO CLASSIFY NFTS AS REGULAR CRYPTO: WHAT ARE THE NEW GUIDELINES?
— BSCN (@BSCNews) June 10, 2024
– South Korea is set to classify certain non-fungible tokens (NFTs) as virtual assets under the ‘Virtual Asset User Protection Act’ taking effect on July 19.
– The Financial Services Commission (FSC)… https://t.co/h4QUOViIBC pic.twitter.com/YLLRHesBj4
However, the classification of NFTs will be determined case-by-case, without an absolute standard.
Additionally, NFTs might be treated as securities if they meet criteria under the Capital Markets Act.
With the 'Virtual Asset User Protection Act' set to take effect on July 19, the FSC has issued new guidelines detailing when NFTs should be considered virtual assets. #NFTs #SouthKoreahttps://t.co/ZVh6rev1g0
— Cryptonews.com (@cryptonews) June 10, 2024
Ahead of new virtual asset regulations coming in July 2024, the FSC’s guidelines clarify that virtual assets, including certain NFTs, can earn interest when deposited on crypto exchanges.
Regular NFTs and central bank digital currencies (CBDCs) are excluded from this provision.