South Korea’s reputation as a trendsetter and technology research leader is rapidly spreading into the blockchain space, as non-fungible token (NFT) adoption has soared in the small East Asian country.
As of 2020, South Korea is among the top 10 countries in the world in the World Intellectual Property Organization’s Global Innovation Index. That level of innovation is on display to the world’s retail consumers through tech giants like Samsung and LG and to gamers through game maker Krafton.
These companies, and many others like them, are also entering the NFT space, launching new collections to customers and launching divisions of your company dedicated to NFT development.
There may be several reasons for the drive to expose retail consumers and the general public to NFTs that go beyond being a simple thank you reward for a purchase. This is the idea presented by the head of strategy of the project KlayChicken NFT, based in Korea, Alex Lim. Today he told Cointelegraph that “NFTs are all the rage, but a lot of people don’t know why.”
“The hype of NFTs in South Korea stems from mixed feelings… I think in the second half of the year the time will come when the entire South Korean NFT industry makes a quantum leap.”
One reason that may contribute to this quantum leap is the lack of a tax on digital assets in South Korea. The tax on cryptocurrencies has been delayed until 2023, but the president elect Yoon Seok-yeol could push to delay that tax for another year, to 2024.
Furthermore, NFTs are not regulated as strict as cryptocurrencies. Although the local financial regulators of the Financial Services Commission (FSC) are working to introduce new rules on NFTs, none exist yet. This has kept the market open to be filled by a litany of new markets on exchanges like Upbit and Bithumb and from other corporations like the gaming giant Krafton to benefit from NFTs.
The co-founder and CEO of Korea-based blockchain ecosystem accelerator DeSpread, GM Chung believes that practical use cases of NFTs will become more common in his country. He told Cointelegraph today that “I expect NFTs to expand into an on-chain social profile layer along with transaction history in the future.”
“Previously, the phenomenon of buying NFTs for community participation was done, but recently, the expansion of NFT utilities is considered an important reason (for their increased use).”
While campaigning, the president-elect Yoon issued a collection of NFTs that followers could mint to feel a sense of belonging to his cause.
Beyond the turnout is South Korea’s Hoseo University, which issued diplomas in the form of NFTs to its 2,830 students who graduated on March 18. Local media outlet Money Today reported in February that the university had decided to issue NFTs to improve accessibility and convenience for students and to prevent forgery of diplomas.
Chung may be underestimating the utility that market participants see in NFTs. Last month, the Ministry of ICT, Science and Future Planning pledged to support the growth of a national metaverse with a $187.7 million grant. Content creators are expected to benefit the most from the new grant.
Content creators appear to be reaping the rewards of increased demand for their services in developing NFT layouts for a wide range of businesses. A simple search for NFT On the leading job search website, JobKorea, it returns 753 unique positions for content creators and business professionals.
The digital assets these creators make are often in the form of objects or characters for games, and emojis for text messaging applications. This familiarity with digital assets is why the co-founder of cryptocurrency investment firm Stablenode Doo Wan Nam believes that Koreans have adopted NFTs so easily. He told Cointelegraph today that “Koreans are more open and understanding when it comes to NFT, which is another form of digital asset.”
Lim said content creators and companies are including NFTs in their business plans because they now see the “potential and usefulness” of NFTs. He added that building a supportive community to increase brand power “has always been the inevitable, albeit difficult, task of any content creator.”
“NFTs have opened a new horizon for those who seek to materialize an ideal community where there is commitment, passion and autonomy.”
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