South Korea Proposes to Ban Crypto Transactions Using Credit Cards

South Korea proposes to ban crypto payments with credit cards.

On January 3, the Korean Financial Services Commission (FSC) proposed amendments to the Credit Finance Act, aiming to ban Korean citizens from trading cryptocurrencies using credit cards.

The main reason for the new amendment is to restrict domestic traders from buying and selling cryptocurrencies on foreign exchanges, the regulator said. FSC further noted that illegal capital flows of domestic funds, as well as money laundering and speculation, are the reasons for their proposed purge.

The Financial Services Commission will collect public comments and get feedback from the public on the proposed amendments until February 13. They are expected to consider and vote for implementation in the first half of 2024, according to Yonhap news agency.

According to the 2021 amendments to the Financial Reporting Law, South Koreans are required to trade using accounts that match their real names on local crypto exchanges. Local trading platforms must also go through a strict review process before offering fiat-to-crypto services and are subject to strict management of partnerships with local banks.

South Korea has continuously made moves to target cryptocurrency legislation in recent times. Before considering banning cryptocurrency payments by credit card, the country announced two bills requiring companies to declare details of the amount of cryptocurrency assets held in their financial statements. Government and trading exchange must set up a reserve fund with a minimum value of 3 billion won, to protect investors after many scandals in the host country.

Recently, South Korea also required officials to declare cryptocurrency assets from 2024. At the same time, the top 5 cryptocurrency exchanges, Upbit, Bithumb, Coinone, Korbit and Gopax, will also soon launch the system. Specialized information system for declaring cryptocurrency asset holdings.