South Korea’s financial regulatory body has introduced new guidelines targeting non-fungible tokens (NFTs) to provide clarity and structure within the burgeoning digital asset landscape, according to reports from Yonhap news agency.
The guidelines, issued by the Financial Services Commission (FSC) on Monday, outline parameters for categorizing NFTs within the regulatory framework. Notably, certain NFTs will be treated akin to regular cryptocurrencies if they no longer retain the unique characteristics that differentiate them from standard digital currencies.
Under the new guidelines, an NFT may be classified as a cryptocurrency if it exhibits characteristics such as mass production, interchangeability, fractionalization, or utility in conducting payments for goods and services, as per Yonhap’s report citing the guidelines.
Conversely, digital tokens lacking transferability or possessing minimal economic value, such as NFT proofs of transactions or event tickets, would be categorized as conventional NFTs.
An FSC spokesperson highlighted that collections featuring a substantial volume of NFTs, potentially numbering in the millions, could be traded and utilized for transactions akin to cryptocurrencies. However, the FSC emphasized the necessity for individual case assessments, indicating that there would be no universal standard for interpreting NFTs as cryptocurrencies within the regulatory context.
Additionally, the FSC’s new regulatory framework suggests that NFTs may be subject to classification as financial securities if they exhibit corresponding characteristics outlined in South Korea’s Capital Markets Act.
