South Korea Considering Banning Credit Card Crypto Purchases

By Mark Hunter

1 day agoFri Jan 05 2024 09:55:24

South-Korea-Considering-Banning-Credit-Card-Crypto-Purchases

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  • South Korea is contemplating blocking credit card purchases of cryptocurrencies from foreign exchanges
  • The government is worried about illegal fund outflows and financial crimes
  • The move would be part of a wider regulatory overhaul

South Korea could block overseas purchases of cryptocurrencies with a credit card as part of a substantial overhaul of its financial regulations. The country’s Financial Services Commission (FSC) has proposed a ban on using credit cards to purchase cryptocurrency from foreign exchanges, citing concerns over the “illegal outflow of domestic funds overseas.” The proposed revision is part of a planned amendment South Korea’s Enforcement Decree of the Credit Specialized Financial Business Act, which aims to combat the rise in illegal fund outflows, money laundering, and speculative activities linked to card transactions on global virtual asset platforms.

South Korea Wants to Rein in Overseas Credit Spending

The legislative notice announcing the intended amendment was posted to the government’s website yesterday, with the FSC planning to designate virtual assets, in accordance with the “Act on the Protection of Virtual Asset Users,” as prohibited for payment for crypto on overseas exchanges.

The move is aimed at not only curbing these illicit practices but also fostering collaboration with international brands to strengthen measures against foreign currency outflow and money laundering activities. The government added that its focus on addressing issues related to credit card payments on digital asset exchanges underscores South Korea’s commitment to staying ahead of emerging financial challenges while encouraging public participation in shaping the regulatory landscape.

Comments Welcome until February 13

The proposed revisions also include standardizing the limit on providing economic benefits during the recruitment of new credit cards and adjusting the maximum issuance amount of prepaid cards. Additionally, the amendment aims to provide credit finance companies with greater flexibility in raising funds by allowing alternative methods, such as the securitization of rental assets.

In a bid to ensure an inclusive regulatory framework, stakeholders, organizations, and individuals have been invited to contribute their opinions on the proposed amendment, with the deadline for comment being February 13.