Why is NFT adoption so high in South Korea?

South Korea’s reputation as a trendsetter and technology research leader is rapidly spreading to the blockchain space as adoption of NFTs soars in the small East Asian nation.

As of 2020, South Korea is among the top 10 countries in the world in the World Intellectual Property Organization's Global Innovation Index. Tech giants like Samsung and LG, as well as gaming maker Krafton, are demonstrating this level of innovation to retail consumers around the world.

These companies, and many like them, are now also delving into the NFT space by offering new collectibles to customers and launching a division of the company dedicated to developing NFTs.

There may be several reasons for the desire to expose NFTs to retail consumers and the general public, and not just as a post-purchase thank you reward. This is the idea proposed by Alex Lim, the strategic lead of the KlayChicken NFT project in South Korea. “NFTs are all the rage, but a lot of people don’t even know why,” he told Cointelegraph today.

"The NFT boom in South Korea stems from a complex emotion... In the second half of this year, the Korean NFT industry will usher in a leap forward."

One reason for this leap could be that South Korea does not tax digital assets. The cryptocurrency tax has been delayed until 2023, but President-elect Yoon Seok-yeol may push to delay the digital asset tax by another year to 2024.

In addition, NFTs are not as strictly regulated as today's cryptocurrencies. While the local financial regulator, the Financial Services Commission (FSC), is working to introduce new NFT rules, there is none yet. That has kept the market open, with exchanges like Upbit and Bithumb and others like gaming giant Kraft launching new marketplaces to profit from NFT trading.

GM Chung, co-founder and CEO of South Korean blockchain ecosystem accelerator DeSpread, believes practical use cases for NFTs will become more common in his country. He told Cointelegraph today, “I expect that in the future, NFTs will expand to include personal profiles and transaction histories on social chains.”

“Previously, the phenomenon of buying NFTs has existed, but recently, the expansion of NFT utilities has been identified as a major reason (the rise in its utilization).”

In order to gain a sense of belonging to his cause during the campaign, Yoon Seok-yeol released "NFT collectibles" that fans can mint.

In addition to its participation, Hoseo University in South Korea awarded NFT diplomas to its 2,830 graduates on March 18. In February, local media Money Today reported that Seoul National University decided to issue NFT certificates in order to improve accessibility and convenience for students and prevent fake diplomas.

Chung may even be underestimating what utility market participants are seeing 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 grants.

While developing NFT designs for numerous companies, content creators appear to be reaping the rewards of increased demand for their services. A simple search for NFTs on leading job site JobKorea reveals 753 unique jobs for content creators and business professionals.

The most common forms of digital assets made by these creators are in-game items or characters, and emoji for messaging apps. This familiarity with digital assets is why the co-founder of crypto investment firm Stablenode Doo Wan Nam believes South Koreans have adopted NFTs so easily. He told Cointelegraph today that “Koreans are more open and understanding when it comes to NFTs, another form of digital asset.”

Lim said content creators and businesses are now incorporating NFTs into their business plans because they now see their “potential and utility.” He added that building a supportive community to strengthen a brand "has always been an inevitable but daunting task for any content creator."

"NFTs open up new horizons for those seeking to realize an ideal community of commitment, passion, and autonomy."