NFTs that are utilized similarly to cryptocurrencies and are manufactured in large quantities will be regulated by South Korea.
The Financial Services Commission (FSC) is leading the charge in creating laws to regulate the virtual digital asset industry in South Korea, and the country is making greater efforts to do so.
According to the Act, officials in Seoul will henceforth categorize large-scale or bulk non-fungible tokens (NFTs) as standard cryptocurrencies.
Among the first nations to formally define NFTs, their status, and their function in the Web3 industry may be South Korea.
NFTs are digital assets with inherent worth. NFTs, which are supported by blockchain networks, may draw inspiration from visual art, animated graphics, GIFs, video, and audio files. An NFT grants its possessor total ownership rights at the time of purchase.
Since most NFTs are one-of-a-kind, their value is preserved. NFTs are tradeable in Web3 ecosystems, which include games with a metaverse component. This gives holders an instant liquidity option.
Regulators in South Korea examined NFTs before supposedly issuing instructions about their governance.
According to research by the South Korean publication Yna.co.kr, NFTs that are released in huge quantities, in big-scale series, or that can be exchanged with other virtual assets, have a strong potential to be classified as virtual assets.
According to the rules, NFTs will be considered “assets” if they are distributed in significant quantities and intended for use as a direct or indirect form of payment. putting them on par with conventional digital currencies.
Web3 companies who use NFTs are requested to notify the FSC of any questionable activity.
Since it first started to consider putting NFTs into a tax class in 2021, South Korea has been conducting research on NFTs.
NFTs were used as a way to raise money for the presidential campaigns in Seoul one year later.
Binance and YG Entertainment, a South Korean company, inked a Memorandum of Understanding (MoU) in February 2022 to work together on NFTs and other web3 initiatives, in light of South Korea’s welcoming stance on the digital assets industry.
The Asian countries of South Korea, Japan, and India are home to a sizable and profitable metaverse gaming business, where NFTs are essential as in-game rewards and characters, according to a number of recent study papers.
By July of this year, the South Korean government hopes to have put its “Virtual Asset User Protection Act” into effect, which will regulate the Web3 sector.
