Government officials in South Korea have announced on May 5 that crypto, including Bitcoin, will not be included in the amended donations law. The Ministry of the Interior and Safety expressed its intention to “expand the scope” of donations but has opted against permitting citizens to donate cryptocurrency, as reported by Kyunghang Shinmun.
Donations Plans: Crypto Excluded
The Ministry intends to revise the Enforcement Decree of the Act on Collection and Use of Donations, enabling citizens to contribute various alternatives to cash for charitable purposes.
These alternatives encompass loyalty points from tech giants like Naver, department store gift vouchers, securities, supermarket vouchers, and listed stocks. Additionally, the Ministry plans to facilitate donations in local government-issued, KRW-pegged stablecoins, and blockchain-powered e-gift vouchers.
Moreover, the scope of donation platforms is set to widen, with more online donation avenues slated for approval. Citizens will also have the option to utilize automatic response systems (ARS)-related technology for charitable giving.
Ministry officials aim for legislative approval of these amendments in time for implementation by July. However, they have not provided specific reasons for excluding cryptoassets from donation options, despite their significant popularity in the country.
Charities to Suffer?
The announcement will undoubtedly disappoint not only crypto enthusiasts but also South Korean charities.
In recent years, these charities have endeavored to initiate donation drives powered by cryptocurrencies. However, they have encountered legal hurdles along the way.
Under South Korean law, charities are not permitted to accept crypto donations, necessitating past campaigns to rely heavily on the assistance of domestic exchanges.
In a January 2024 article published in Bokji Times, Jang Yoon-ju, a researcher for The Beautiful Foundation—one of South Korea’s prominent charities—outlined the challenges faced by charities in relation to cryptocurrency in the country.
According to Jang, potential donors have often inquired about making cryptocurrency donations. However, she noted that such queries were frequently met with difficulty in providing satisfactory responses.
Exchanges Play Key Role
Jang pointed out that previous endeavors to establish crypto-powered donation platforms had faltered, citing notable initiatives in 2014 and 2018 that ultimately fizzled out.
She further noted that the adoption of cryptocurrency donations gained momentum “in earnest” in 2020, when four major domestic charitable organizations actively encouraged the public to contribute tokens.
However, in each instance, charities were compelled to collaborate with crypto exchanges to convert the coins into cash, which was then transferred to the respective organizations.
Rising Popularity of Crypto Donations in South Korea?
The researcher also highlighted the growing popularity of crypto donations in South Korea, noting a trend where many individuals express interest in contributing their coins to charitable causes abroad.
Jang disclosed that South Koreans collectively donated BTC 14 to charities involved in aiding victims of the 2023 Turkey-Syria earthquakes. These donations were facilitated through a platform operated by Dunamu, the company behind South Korea’s leading Upbit exchange.
Additionally, she mentioned that 902 South Korean individuals contributed “digital assets” valued at approximately $118,000 to charities supporting refugees of the conflict in Ukraine during the previous year.
Furthermore, the Ukrainian government has established direct platforms for crypto donations, catering to international donors.
