South Korea has announced that mass-produced nonfungible tokens (NFTs) will be classified as virtual assets, making them eligible for earning interest when deposited on exchanges, according to guidelines issued by the Financial Services Commission (FSC) in 2023.
The FSC, South Korea’s financial regulatory authority, recently clarified when NFTs can be considered virtual assets. As reported by local news outlet News1 on June 10, the FSC stated that NFTs would be regulated similarly to cryptocurrencies if they lack distinct characteristics that set them apart from other virtual assets.
According to the FSC, NFTs that are mass-produced, divisible, and can be used for payments will be categorized as virtual assets.
Mass-Produced NFTs Could Be Used for Payments
The FSC specified that NFTs with minimal or no intrinsic value, such as those used for ticketing or digital certificates, will be treated differently and classified as general NFTs.
Jeon Yo-seop, head of Financial Innovation Planning at the FSC, explained in an interview that NFT collections with large quantities could likely be used as a payment method. He noted that if a collection includes one million NFTs, it would result in numerous transactions, potentially making these NFTs viable for payments.
Despite this, the FSC emphasized that it will assess NFT collections on a case-by-case basis. This approach means there will not be a strict, universal standard for interpreting NFTs as cryptocurrencies.
Additionally, the new guidelines suggest that NFTs could be treated as securities if they exhibit features outlined in South Korea’s Capital Markets Act.
Summary Review: South Korea’s Financial Services Commission has issued guidelines that classify mass-produced NFTs as virtual assets, potentially allowing them to earn interest when deposited on exchanges. This regulation applies to NFTs that are mass-produced, divisible, and usable for payments, aligning them closely with cryptocurrency. However, NFTs with minimal intrinsic value, such as those used for ticketing or digital certificates, will be classified differently. The FSC will review each NFT collection individually, ensuring a flexible approach to regulation. Additionally, NFTs may be treated as securities if they meet criteria specified in the Capital Markets Act.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
