South Korea is considered a leading innovator in the tech world, and so perhaps it should come as no surprise that this Asian nation is eagerly adopting NFTs at a rate few countries can match.
But there are many other nations around the world that are also leaders in technology, and they lag behind South Korea when it comes to NFTs. So what makes South Korea unique? Why are NFTs so popular in this nation?
South Korean Conglomerates are Leading the Way
First of all, it should be noted that some of South Korea’s biggest companies are creating entire divisions that are dedicated to developing NFTs. While many companies in the west are “dipping their toes” into the world of NFTs, South Korean companies are jumping in headfirst.
And this trend extends far beyond tech companies. Almost every aspect of South Korean culture is getting involved with NFTs, from boy bands to politicians. On March 7th, it was reported that South Korea’s two presidential candidates were issuing NFTs in a desperate bid to win votes. The two candidates were neck-and-neck, and the race was far too close to call in the lead-up to the election.
Although Yoon Suk-yeol eventually won, both candidates issued tens of thousands of NFTs. Suk-yeol plans to issue more than 25,000 NFTs in total. This was obviously an attempt to win over younger voters, and while we’re sure that Suk-yeol’s victory was due to factors beyond NFTs, it should be noted that he minted more NFTs than his rival, Lee Jae-myung.
Digital Assets are Fairly Unregulated in South Korea
South Korea’s obsession with NFTs might have something to do with the fact that there are no taxes on digital assets. While the crypto tax is coming, it will not arrive until 2023, and the new president Suk-yeol plans to delay that arrival until 2024.
NFTs are also not regulated to the same extent as cryptocurrencies. In February, it was reported that the Financial Supervisory Service in South Korea was planning to “prepare countermeasures” against scams and fraud within the digital assets market.
It also stated that it planned to heighten the verification of initial public offerings of businesses that deal in NFTs and the metaverse. However, some NFT projects are able to exploit loopholes and collect investments without actually meeting these regulatory requirements.
So although NFTs are fairly unregulated and untaxed today in South Korea, things are changing quickly. Last year, the country created strict new regulations that led to many exchanges closing down.
The craze over NFTs will probably continue in South Korea regardless of these new laws. Seeing as the president is seemingly an NFT enthusiast, it is unlikely that the government will crack down on this market. However, new regulations will arrive eventually, and this could lead to a frenzy of NFT purchases by the time 2024 rolls around.