South Korea proposes ban on credit card payments for cryptocurrencies

South Korea’s top financial regulator is proposing to change the country’s credit finance laws to prohibit local citizens from purchasing cryptocurrency with credit cards.

In a Jan. 3 legislative notice, the country’s Financial Services Commission (FSC) cited concerns about illegal outflows and money laundering that could come with South Korean citizens buying cryptocurrency from foreign exchanges.

“Concerns have been raised about illegal outflow of domestic funds overseas due to card payments on overseas virtual asset exchanges, money laundering, speculation, and encouragement of speculative activities,” the FSC stated.

“Accordingly, virtual assets […] are stipulated as prohibited for payment.”

X post from South Korea’s Financial Services Commission. Source: X

Under current laws, local cryptocurrency exchanges only allow transactions between virtual assets through deposit and withdrawal accounts where the user’s identity can be verified, but these rules don’t apply to foreign crypto exchanges, according to local outlet Yonhap.

The financial services regulator is now seeking public input on the proposal, which will last until Feb. 13. It is expected to go through a review and resolution process and aims to be implemented in the first half of 2024.

Main, News