In a surprising move, South Korea has opted to exclude digital currencies from the list of approved assets for charitable donations under newly amended laws.
According to a report from Kyunghyang Shinmun on May 5, the Ministry of Public Administration has introduced several amendments to the country’s Donations Act but has deliberately left out cryptocurrencies like Bitcoin.
Starting in July, South Korean citizens looking to support charitable causes will have several new donation avenues open to them, including department store gift vouchers, stocks, and loyalty points from Naver, a leading Korean internet conglomerate. However, cryptocurrencies will not be among the permissible methods.
Background and Expansion of Donation Methods
The original Donations Act, enacted in 2006, was designed at a time when payment technologies were far less diverse and smartphones were not yet ubiquitous.
Since then, the methods of donation have expanded significantly to include more modern solutions such as automated response systems, postal, and logistics services.
This evolution reflects the broader changes in how financial transactions are conducted in the digital age.
Despite the growth in donation methods, the Ministry of Public Administration has not provided specific reasons for excluding crypto assets from the legislation.
It’s a notable omission, given the popularity of digital currencies in South Korea and their increasing use in global philanthropy.
As reported by The Giving Block, more than $2 billion in cryptocurrencies were donated worldwide as of January 2024.
International Contrast and Crypto Crime Concerns
This regulatory decision contrasts sharply with trends in the United States, where over half of American charities now accept donations in digital assets, showcasing a more embracing approach towards cryptocurrencies in philanthropic sectors abroad.
The exclusion of crypto from approved donation methods in South Korea might also reflect broader concerns regarding digital asset regulation in the country. Recently, the South Korean government announced plans to elevate its temporary crypto crime investigative unit to a full department, aiming to address the rising incidents of cryptocurrency-related crimes and financial fraud.
Furthermore, challenges persist for international crypto exchanges attempting to penetrate the South Korean market. Crypto.com, a Singapore-based exchange, has encountered significant regulatory hurdles, including an “emergency on-site inspection” by South Korean authorities following findings of Anti-Money Laundering issues with the data submitted by the exchange.
As South Korea continues to refine its approach to digital currencies, the decisions made today could shape the regulatory landscape for years to come. While the current legislation may sideline crypto assets in philanthropic efforts, the dynamic nature of digital finance suggests that future amendments could eventually open the door to these modern donation methods.
