Digital currencies have been left out of recently amended donation legislation in South Korea, which could have a negative impact on the country’s charities and donation efforts. According to local media outlet Kyunghyang Shinmun, the Ministry of Public Administration has filed some amendments to the “Donations Act,” but it restricts the use of crypto assets for donations. Starting in July, individuals wishing to donate to charitable organizations will have various new methods available, such as department store gift vouchers, stocks, and loyalty points from Korean internet giant Naver, but they will not be able to use crypto assets like Bitcoin (BTC).
The “Donations Act” was first enacted in 2006 when there were fewer payment methods available and smartphones were not as widespread. It has now been expanded to include automated response systems, postal services, and logistics services, in addition to bank transfers and online methods. Despite the popularity of digital asset donations in South Korea, the Ministry did not provide a reason for excluding them. However, the legislation will allow donations in local government-issued stablecoins pegged to the Korean won and blockchain-issued gift vouchers.
According to TheGivingBlock, more than $2 billion has been donated globally using cryptocurrency as of January 2024. This is a market that local charities in South Korea will not be able to tap into. On the other hand, more than half of American charities now accept donations in digital assets.
In other news, South Korea is looking to elevate its temporary crypto crime investigative unit into an official department to combat the increasing number of crypto-related crimes and financial frauds. Singapore-based crypto exchange Crypto.com is also facing challenges in entering the South Korean market due to regulatory hurdles. In April, South Korean authorities discovered Anti-Money Laundering (AML)-related issues in the exchange’s submitted data and launched an “emergency on-site inspection” to monitor its activities.
In summary, the exclusion of digital currencies from South Korea’s donation legislation could hinder the country’s charities and donation initiatives. While other methods of donation are being expanded, such as department store gift vouchers and loyalty points, digital assets like Bitcoin (BTC) will not be accepted. This is in contrast to the growing acceptance of digital asset donations by American charities. Additionally, South Korea is taking steps to tackle crypto-related crimes, while Crypto.com faces regulatory obstacles in entering the South Korean market.