South Korea’s Regulator FSC Excludes NFTs and CBDCs from Crypto Interest Earningsby Fintech News Hong Kong December 12, 2023
South Korea’s financial regulator, the Financial Services Commission (FSC), has announced that from July 2024, individuals investing in digital assets will earn interest on their deposits at crypto exchanges.
However, this will not apply to non-fungible tokens (NFTs) and central bank digital currencies (CBDCs), which the FSC has excluded.
The FSC clarified that NFTs will not be eligible for interest earnings due to their distinctive characteristics and non-fungibility. Primarily perceived as collectables or for ownership purposes, NFTs are not considered typical investment assets.
Conversely, CBDCs issued by central banks do not fall under the category of traditional cryptocurrencies and are subject to different regulatory standards.
Additionally, the FSC plans to enforce these crypto regulations as part of the “Enforcement Decree and Supervisions Regulations of the Virtual Asset User Protection Act.” According to this decree, tokens associated with NFTs and CBDCs do not qualify as virtual assets under the law.
However, the FSC notes exceptions where tokens categorised as NFTs also function as payment methods and are issued in significant quantities. These may fall under the virtual asset category and thus be eligible for interest earnings when deposited on cryptocurrency exchanges.
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