South Korea calls for ban on credit card use for crypto

credit: Shutterstock
credit: Shutterstock

The Financial Services Commission (FSC) of South Korea is aiming to place a ban on buying and selling cryptocurrencies with credit cards. 

The FSC stated it plans to make amendments to the Credit Specialized Financial Business Act “in order to diversify the financing methods of credit finance companies”, citing “illegal outflow of domestic funds overseas”.

“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,” stated the FSC. 

“In the future, it is expected that a basis for cooperation with international brands will be established and prevention of foreign currency outflow and money laundering will be strengthened.”

New credit cards are provided with 100% of the annual fee online and 10% of the annual fee offline. The limit of economic benefits that can be provided when recruiting new credit cards is set at 100% of the annual fee, regardless of whether acquired online or offline. 

The maximum issuance allowance for prepaid credit cards is set at 500,00KRW (£300,000), but can be extended under the Child Welfare Act. 

South Korea has been one of the countries at the forefront of technological innovation in the payments sector, announcing last November that it will be launching a test pilot of its native central bank digital currency (CBDC) to 100,000 citizens this year.