South Korea's Financial Services Commission (FSC) will recognize non-fungible tokens (NFTs) as virtual assets starting July 19.

This decision permits NFTs to be used for payments and exchanges, with potential interest accrual when deposited in exchanges.

NFT issuers must adhere to the Financial Investment Services and Capital Markets Act, with non-security NFTs categorized as 'digital assets'.

The FSC will evaluate NFTs based on criteria such as abundance, divisibility, and payment or exchange utility.

NFTs lacking transferability or payment utility may not qualify as digital assets.

These regulations aim to provide clarity in South Korea's evolving NFT market and could potentially raise NFT prices due to their regulated status.

The FSC will offer consultation services to help businesses navigate the new regulatory framework on a case-by-case basis.