JAKARTA - South Korea's reputation as a trendsetter and leader in technology research is rapidly spreading to the blockchain realm. Hence the adoption of nonfungible tokens (NFT) has skyrocketed in East Asian countries, in the last year.
In 2020, South Korea has been declared among the top 10 countries in the world in the Global Innovation Index by the World Intellectual Property Organization. That level of innovation is made clear to global retail consumers by tech giants like Samsung and LG and to gamers through the game maker, Krafton.
Those companies, and many like them, are now also exploring the NFT space by delivering new collections to customers. They even launched a company division dedicated to developing NFTs.
There may be several reasons for wanting to expose retail consumers and the general public to NFTs that are more than just a thank-you gift for purchase. This is an idea put forward by the Strategy Lead at the Korea-based KlayChicken NFT project, Alex Lim. “NFT is very popular but a lot of people don't even know why", Lim told Cointelegraph, recently.
"The NFT frenzy in South Korea stems from a mixture of sentiments... I believe that in the second half of the year, the time will come when South Korea's entire NFT industry takes a quantum leap", he added.
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One of the reasons that could contribute to this quantum leap is the lack of taxes on digital assets in South Korea. The crypto tax has been postponed until 2023, but South Korea's president-elect, Yoon Seok-yeol, may delay the tax for another year until 2024.
Also, NFTs are not as tightly regulated as cryptocurrencies are now. Although local financial regulators at South Korea's Financial Services Commission (FSC) are working to introduce new NFT rules, there are still none. This keeps the market open for several new markets to fill on exchanges like Upbit and Bithumb and from other companies like gaming giant Krafton to profit from NFT.
Co-founder and CEO at Korea-based blockchain ecosystem accelerator, DeSpread, GM Chung believe that practical use cases for NFT will become more common in his country. He told Cointelegraph that he hopes it continues to grow.
“I expect NFT to develop into a social on-chain profile layer along with future transaction history", Chung said. "Previously, the phenomenon of purchasing NFT for public participation has been carried out, but recently, the expansion of NFT's utility is considered to be the main reason (increasing its utilization)".
While campaigning, president-elect Yoon also put out a collection of NFTs that followers can print to feel a sense of belonging to his cause.
Surpassing this NFT participation in South Korea's Hoseo University which issued diplomas in the form of NFT to 2,830 students who graduated on March 18. Local news outlet Money Today reported in February that the university decided to issue an NFT to improve accessibility and convenience for students and to prevent diploma fraud.
Chung may even be underestimating what utility market players at NFT see. Last month, South Korea's Ministry of ICT, Science, and Future Planning pledged to support the growth of the national Metaverse with a US$187.7 million (IDR 2.6 trillion) grant. Content creators are expected to benefit the most from this new grant.
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Content creators seem to be reaping the rewards of the growing demand for their services in developing NFT designs for various companies. A simple search for NFT on the leading job search site JobKorea yields 753 unique positions for content creators and business professionals.
The digital assets created by their creators are most often in the form of in-game items or characters and emojis for text messaging apps. This familiarity with digital assets is why the co-founder of crypto investment firm Stablenode, Doo Wan Nam, believes that Koreans have adopted NFT very easily.
"Koreans are more open and understanding about NFT which is another form of digital asset", said Doo Wan Nam.
While Lim said content creators and businesses are now including NFT in their business plans as they now see the "potential and utility" of NFT. He added that building a supportive community to increase brand strength "is always an unavoidable, yet difficult task for any content creator."
"NFT has opened new horizons for those who seek to create an ideal community where there is commitment, passion, and autonomy", said Lim.
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