South Korea’s reputation as a trendsetter and leader in technology research is quickly spreading to the blockchain space as the adoption of non-fungible tokens (NFTs) has skyrocketed in the small East Asian country.
As of 2020, South Korea is ranked among the top ten countries in the world in the Global Innovation Index of the World Intellectual Property Organization. This level of innovation is becoming apparent to global retail consumers thanks to tech giants like Samsung and LG, and to gamers thanks to game maker Krafton.
These companies, and many like them, are now also delving into the NFT space, offering new collections to customers and launching NFT divisions within their company.
There may be several reasons for the desire to introduce NFTs to retail consumers and the general public, which goes beyond a simple thank you prize for a purchase. This idea was presented by the head of the strategy department of the Korean project KlayChicken NFT, Alex Lim. Today he told Cointelegraph: “NFTs are all the rage, but a lot of people don’t even know why.”
“The NFT hype in South Korea stems from a mixture of sentiment…I believe there will be a time in the second half of the year when the entire South Korean NFT industry will take a quantum leap.”
One of the reasons that may contribute to this qualitative leap is the absence of a tax on digital assets in South Korea. The cryptocurrency tax has been deferred until 2023, but President-elect Yoon Seok-yeol may push for the tax to be postponed for another year, until 2024.
In addition, NFTs are not regulated as strictly as cryptocurrencies are now. Although the local financial regulators at the Financial Services Commission (FSC) are working on introducing new NFT rules, they do not yet exist. This has left the market open to flooding with many new marketplaces on exchanges like Upbit and Bithumb, as well as other corporations like gaming giant Krafton to profit from NFTs.
G. M. Chang, co-founder and CEO of Korean blockchain ecosystem accelerator DeSpread, believes practical NFT use cases will become more common in his country. Today, he told Cointelegraph that “I expect NFTs to become a social profile layer on the web in the future along with transaction history.”
“There used to be a phenomenon of buying NFTs for community participation, but more recently, the expansion of NFT utilities is considered the main reason (for the growth in its use).”
During the campaign, President-elect Yoon released a collection of NFTs that followers could mint to feel connected to his cause.
In addition to participating, South Korea’s Hoseo University issued diplomas in the form of NFTs to its 2,830 graduates on March 18. Local news outlet Money Today reported in February that the university decided to issue NFTs to improve accessibility and convenience for students and counterfeit diplomas.
Chang may even underestimate what utility market participants see in NFTs. Last month, the Ministry of ICT, Science and Future Planning pledged to support the development of the national Metaverse with a $187.7 million grant. Content creators are expected to benefit the most from the new grant.
Content creators seem to be reaping the benefits of increased demand for their NFT project development services for a wide range of companies. A simple NFT search on the leading job search website JobKorea yields 753 unique job openings for content creators and business professionals.
The digital assets that these creators create are most often in-game items or characters, as well as emoji for text messaging apps. This exposure to digital assets explains why Stablenode investment firm co-founder Du Van Nam believes Koreans have embraced NFTs so readily. Today, he told Cointelegraph that “Koreans are more open and understanding when it comes to NFTs, which is another form of digital asset.”
Lim said content creators and businesses are now including NFTs in their business plans because they now see the “potential and utility” of NFTs. He added that building a supportive community to increase brand influence “has always been an inevitable but challenging task for any content creator.”
“NFTs have opened new horizons for those who seek to materialize the ideal community that has commitment, passion and autonomy.”