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South Korea’s financial regulator, the Financial Services Commission (FSC) recently proposed a new amendment to the Credit Finance Act, which will introduce significant restrictions on the use of credit cards for cryptocurrency.
The FSC presented the amendment as a strategic move meant to put a stop on the misuse of funds and speculative activities.
According to the regulator, the primary goal of the amendment is to prevent South Korea’s citizens from buying cryptocurrencies on foreign exchanges. The regulator explained that allowing that could lead to illegal fund outflows, money laundering, promotion of speculative behavior, and alike.
Since the regulator wants to avoid that, the best way to do it is to limit the purchase of cryptocurrencies to local platforms, which are strictly regulated and where the FSC can monitor everything that is happening.
What does the new amendment propose?
According to the proposed amendment, the South Korean financial regulator is specifically targeting the illegal outflow of domestic funds, which are currently leaving the country and going overseas via card payments on crypto exchanges. The FSC has acknowledged concerns related to speculative activities, money laundering, and alike, and all of it together led it to propose a prohibition on credit card payments.
SOUTH KOREA'S CRYPTO CREDIT CARD PURCHASING PROHIBITION
How the proposed Amendment could impact citizens
– South Korea's top financial regulator, the Financial Services Commission (FSC), proposes an amendment to the credit finance act.
– The amendment aims to effectively ban… https://t.co/yd5Er251ZY pic.twitter.com/PZ0os0njDq— BSCN (@BSCNews) January 4, 2024
Furthermore, the regulator also stressed that virtual assets will be prohibited for payment. It insists that the move will align South Korea with international standards and foster cooperation with global brands. This could even lead to a potential strengthening of measures against foreign currency outflow and enhance AML policies, as the regulator said.
For the moment, the FSC expects the public to voice their opinions on the proposed amendment, marking February 13 of the new year as the deadline for the public to share its thoughts on the matter. If the situation proceeds in accordance with the predicted timetable, the regulator expects that the amendment will be implemented during the first half of this year.
Public feedback could introduce a new perspective
As for the public feedback, the regulator has invited South Korean citizens, organizations, and other entities to voice their opinions on the amendment. Everyone will have an opportunity to submit their feedback online using the Center for Participatory Legislation.
The regulator believes that having a public view on the issue will ensure a comprehensive consideration if diverse viewpoints. The regulator will still review and vote on the proposed amendment swiftly, with the intention of implementing it as quickly as possible.
However, public feedback could provide some good points that might lead to certain changes in the amendment if the regulator decides that it can make it better by introducing such modifications.
It is also worth noting that the move came soon after the country’s National Tax Service finally clarified its stance on cryptocurrencies, bringing the long-awaited clarity for decentralized crypto wallet holders. The National Tax Service announced that individuals who own virtual assets through non-custodial, decentralized wallets will not be subject to overseas financial account reporting.
The post South Korea proposes restrictions on the use of credit cards for crypto transactions appeared first on Invezz
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