South Korea’s Top Regulator Dismisses Talks of Building National Bitcoin Reserve

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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November 24, 2024

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The head of South Korea’s top financial regulator has dismissed the notion of creating a national Bitcoin reserve “for the time being.”

Per Joongang Ilbo and News Prime, the Chairman of the Financial Services Commission (FSC) Kim Byung-hwan made the comments during a TV interview on November 24.

National Bitcoin Reserve No-go: Regulatory Chief

Joongang reported that Kim suggested there was no “need” for Seoul “to stockpile cryptocurrencies, as has been promised by US President-elect Donald Trump.”

“We aren’t anywhere near a move to [build a Bitcoin reserve] at the moment.”

Kim Byung-hwan, Chairman of the South Korean Financial Services Commission

Kim said that South Korea would wait to see how other nations respond to US President-elect Donald Trump’s crypto adoption plans before acting. He said:

“The level to which we will foster [the crypto industry] in the future will ultimately be a matter of judgment. It will be based on whether other countries’ stances change due to US government policy.”

The FSC chief added that “domestic conditions” would also influence the regulator’s thinking.

“Our priority is working out how best to further protect [domestic crypto] investors. The idea of holding [Bitcoin] as a reserve asset is an issue that we will have to take some time to look at.”

Kim

No Bitcoin Benefit?

Kim also suggested that the FSC is unconvinced that BTC and other coins could benefit the nation’s economy.

“We consider stock market investments to be an important economic factor, as the stock markets create a virtuous circle. However, we are not sure if cryptoassets can really have a positive effect on the economy. So we need to investigate the crypto market, which is outpacing the stock market in terms of trading volumes.”

Kim

The FSC chief said the regulator would “look into” the “crypto rush.” And he warned that the body would “focus” and “closely monitor” suspicions of “unfair trading.”

“Cryptoasset prices are rising rapidly in a short period of time and the market itself is highly volatile. […] We are in a situation where we are trying to strike a balance, considering whether to foster [the industry] or focus on protecting investors.”

Kim

‘Dangers of Crypto’

And Kim added that the FSC originally “held the position” that crypto “should not be brought” into the mainstream “because it was dangerous.”

But, he conceded, much has since changed, particularly with the launch of the Virtual Asset Protection Act in July this year. Kim said:

“There were concerns that Bitcoin was not worth fostering for a long time or that its volatility was too high and it could be considered a scam. […] For now, our priority is working out how to connect this market to the existing financial system and how to establish a relationship with it.”

Kim concluded that the government needs to “closely monitor” the markets to try to intercept attempts to manipulate token prices. He said:

“Prices are rising rapidly in a short period of time. And the market itself is highly volatile. So the government needs to carefully check to see if any traders are engaging in unfair trading.”

Regulators vs. Lawmakers

The FSC has typically taken a very conservative line on all things crypto-related. Lawmakers, however, have tried to woo voters with more progressive promises.

While many MPs have called on Seoul to allow companies to hold crypto on their balance sheets, the FSC has urged caution.

The regulator has also tried to dissuade politicians from rushing into a decision on green-lighting Bitcoin spot ETFs.