The donation legislation in South Korea has been amended, and unfortunately, digital currencies have been excluded from the new changes. This decision could have a negative impact on the country’s charities and their donation drives. According to a report by Kyunghyang Shinmun, the Ministry of Public Administration announced that while some amendments have been made to the “Donations Act,” the use of crypto assets for donations will be restricted.
Starting in July, individuals who wish to donate to charitable organizations or causes will have various new methods available to them, such as department store gift vouchers, stocks, and loyalty points from the Korean internet giant Naver. However, the use of crypto assets like Bitcoin (BTC) will not be permitted.
The “Donations Act,” which was first enacted in 2006, has been updated to reflect the changing landscape of payment methods. With the rise of smartphones and the availability of different payment options, the act now includes methods such as automated response systems, postal services, and logistics services, in addition to traditional bank transfers and online methods.
The Ministry did not provide a specific explanation for excluding digital asset donations, despite their popularity in South Korea. However, the legislation will allow donations in local government-issued stablecoins pegged to the Korean Won and blockchain-issued gift vouchers.
This decision is significant as more than $2 billion has been donated globally using cryptocurrency as of January 2024, according to TheGivingBlock. Unfortunately, local charities in South Korea will now be unable to tap into this market.
In contrast, it was recently reported that over half of American charities now accept donations in digital assets, highlighting the growing acceptance of cryptocurrencies in the United States.
In other news related to South Korea, the country is looking to elevate its temporary crypto crime investigative unit to an official department in order to combat the increasing number of crypto-related crimes and financial fraud. However, regulatory hurdles have been a challenge for Singapore-based crypto exchange Crypto.com to enter the South Korean market. In April, South Korean authorities discovered Anti-Money Laundering (AML)-related issues with the exchange and conducted an “emergency on-site inspection” to monitor its activities.
In conclusion, the exclusion of digital currencies from the amended donation legislation in South Korea is a setback for the country’s charities and donation drives. While other alternative methods of donation are being introduced, the popularity and potential of digital assets for charitable giving will now go untapped in South Korea.