Key Points
- Kim Byung-hwan, nominee for FSC chairmanship, expresses caution about corporations investing in cryptocurrencies.
- South Korea’s financial authorities are prioritizing financial stability and regulatory review over market development.
Kim Byung-hwan, the nominee for chairmanship of the Financial Services Commission (FSC), has expressed reservations about allowing corporations to invest in cryptocurrencies.
This was expressed during a confirmation hearing at the National Assembly’s Political Affairs Committee on the 22nd of July.
Cautious Approach to Bitcoin ETFs
Kim Byung-hwan, who is likely to succeed FSC Chairman Lee Bok-hyun, addressed this issue in response to a Democratic Party lawmaker’s inquiry.
He emphasized the need for investor protection over market development.
Despite lawmakers’ push for the FSC to approve spot Bitcoin ETFs, regulators advised a more prudent approach.
They suggested waiting to observe the results of U.S. actions before deciding, showing a careful stance on introducing spot Bitcoin ETFs in South Korea.
Kim also stated that virtual assets should not be considered as currency or financial products.
Impact on South Korea
Interestingly, this news comes amid recent actions by South Korea’s financial security regulator, which introduced measures on the 19th of July to protect users interacting with virtual asset service providers (VASPs).
This move by South Korea’s financial authorities differs from the aggressive moves made by international regulators.
They do not consider virtual assets suitable as underlying assets for ETFs, leading to a ban on new listings and brokerage services.
This implies that decisions about spot ETFs will prioritize financial market stability and the potential impact on financial institutions.
Officials are focusing more on regulation over market expansion, emphasizing user protection and maintaining market order.
They stress the need for further discussions on regulations, especially regarding the entry and operations of virtual asset providers.
Kim summed it up best when he highlighted the need to prioritize user protection and maintaining market order, and first review regulations on entry and business practices of virtual asset operators.
