- South Korea has excluded cryptocurrencies from its updated donation legislation, potentially impacting the country’s charities and donation drives.
- Despite this, the amended law will allow donations in local government-issued stablecoins and blockchain-issued gift vouchers.
- South Korea is also ramping up efforts to combat cryptocurrency-related crimes and financial fraud.
South Korea’s exclusion of cryptocurrencies from its donation laws could limit charitable innovation, despite the country’s push to modernize with stablecoins and blockchain vouchers.
Exclusion of Cryptocurrencies in Donation Laws
South Korea has decided to exclude cryptocurrencies from its amended donation legislation, a move that could impact the country’s charities and donation drives. The Ministry of Public Administration announced that the updated “Donations Act” will allow various new donation methods, such as department store gift vouchers, stocks, and loyalty points from Korean internet giant Naver, but it will not permit the use of crypto assets like Bitcoin.
Impact on Charitable Donations
The decision comes as a surprise, especially considering the growing popularity of cryptocurrencies in South Korea. Globally, over $2 billion has been donated using cryptocurrency as of January 2024, according to reports. However, South Korean charities will not be able to tap into this market due to the exclusion of digital assets from the amended law.
Inclusion of Stablecoins and Blockchain Vouchers
Despite the exclusion of cryptocurrencies, the amended legislation will permit donations in local government-issued, KRW-pegged stablecoins and blockchain-issued gift vouchers. This move aims to modernize the donation process, which was first enacted in 2006 when there were fewer types of payment methods and smartphones were not as prevalent.
Efforts to Combat Cryptocurrency-Related Crimes
South Korea is also making efforts to combat cryptocurrency-related crimes and financial fraud. To combat the rise in crypto-related crimes, the government recently announced intentions to elevate its interim crypto crime investigation unit to the status of an official agency. Furthermore, Crypto.com, a Singapore-based crypto exchange, is encountering regulatory challenges in joining the South Korean market. South Korean officials discovered anti-money laundering (AML) issues in the exchange’s data, prompting an “emergency on-site inspection” to monitor its operations.
Conclusion
South Korea’s decision to exclude cryptocurrencies from its donation laws could potentially limit the country’s charitable innovation. However, the inclusion of stablecoins and blockchain vouchers in the amended legislation reflects the country’s push to modernize. As the country continues to balance crypto inclusion with regulatory scrutiny, it remains to be seen how these changes will impact the future of charitable giving in South Korea.
