• South Korea is facing an increase in insolvency rates among people aged 20-39.
• Crypto investment is being blamed for this spike as it provides an alternative to the stagnant stock exchange and high unemployment rate.
• The Seoul Rehabilitation Court has reported that nearly half of all debtors who applied for personal rehabilitation last year were in the 2030 demographic.
Youth Insolvency Spikes in South Korea
South Korea is experiencing a rise in the number of people aged 20-39 declaring insolvency, with crypto investment being blamed for this spike. According to Maeil Shinmun, the Seoul Rehabilitation Court has reported that nearly half of all debtors who applied for personal rehabilitation last year were in the 2030 demographic.
Personal Rehabilitation System
Under South Korean law, individuals can apply to the judiciary for “personal rehabilitation” status. This is a legal system that allows individuals who cannot repay their debts to enjoy a stay of execution prior to bankruptcy. Individuals must agree to a three-year court-approved repayment plan if they are accepted onto the program; failure to comply with the plan will mean bankruptcy charges can be initiated against them. In March last year, 7,455 people filed personal rehabilitation plan applications – with 11,228 applications taking place last month alone – showing an unprecedented spike in insolvencies amongst young people.
Why Are Young People Investing in Crypto?
Young South Koreans feel like several factors are driving them into crypto investments: these include a stagnant stock exchange, a youth unemployment rate of over 7%, and an increasingly inaccessible housing market. Even conventional financial advisers have claimed that buying crypto is “essential” rather than “optional” for this age group due to its potential as an alternative income source compared to traditional methods such as stocks or real estate investments.
Insolvency Rates Among Other Countries
Youth unemployment rates are higher across other countries too: e.g., 61% in South Africa, 53% in Nigeria, 29% in Greece and Spain, 23% in Sweden, 22% Italy and France etc.. It seems likely then that many young people across different countries could be turning towards cryptocurrencies due to their lack of access economy options available within their local markets or economies more generally.
In conclusion then it appears clear that crypto investment has been blamed by some for causing increased levels of insolvency amongst young people – particularly those from ages 20-30 – across South Korea (and potentially other countries). Despite this however it also seems apparent that many young people may have few other economic options open to them beyond cryptocurrency investments given prevailing economic conditions around the world at present