South Korea Updates Donations Law, Welcomes Stablecoins While Banning Cryptocurrency Contributions

The amended law allows donations in both local government-issued, KRW-pegged stablecoins and blockchain-based gift vouchers. By this legislation, the use of cryptocurrencies for donating to charity within the country is firmly regulated. One local news media outlet, Kyunghyang Shinmun, reported on the government's introduction of a revised "Donations Act," which excludes digital assets from being used for philanthropy. Looking back at the "Donations Act," the Ministry of the Interior and Safety broadened the types of acceptable donations but excluded digital assets like Bitcoin (BTC).

South Korea Says No Crypto Donations

The original Donations Act was legislated in 2006, before smartphones were widespread and the diverse payment options available today existed. This has changed with the advent of cryptocurrencies in 2009, which remain unregulated compared to the various existing payment options. In January 2024, the Ministry pushed for a review of the Donations Act with new measures that don't permit digital assets despite South Korea's growing crypto market.

However, the updated law welcomes donations in local government-issued, KRW-pegged stablecoins and blockchain-based gift vouchers. It also allows traditional bank transfers and online payments.

According to the report, the regulations include automated response systems, postal services, and logistics services. The law will take effect in July if approved by the State Council following a legislative notice by June 10.

"We are going to go through administrative procedures so that the enforcement ordinance can be proclaimed by the end of July, and we are going to implement it immediately after the proclamation," said one of the Ministry of Public Administration and Security officials.

South Korea to Accept Gift Cards for Donations

Starting in July, individuals who wish to contribute to social welfare will have access to donation gift cards ranging from 10,000 to 100,000 won and more. The amended law also lists the specific purposes for which the collected donations will be used: supporting children, adolescents, and people with disabilities, promoting employment, addressing low birth rates, aging populations, and rural decline, and revitalizing local communities, among other public interests.

Additionally, the legislation designates the second Monday of December each year as "Donation Day," calling on national and local governments to host commemorative events and reward donors.

The exclusion of cryptocurrencies from charitable donations in South Korea comes when global digital donations are increasing. As per TheGivingBlock, donations made through virtual assets exceeded $2 billion as of January 2024.