South Korea is potentially looking at new regulations regarding corporate investments in cryptocurrency, as the likely new head of the top South Korean financial regulator, Kim Byung-hwan, expresses caution about allowing corporations to invest in crypto. Kim’s comments came during a confirmation hearing at the National Assembly’s Political Affairs Committee, where he indicated that current policies should focus more on investor protection rather than market development. The nominee is expected to take over from FSC Chairman Lee Bok-hyun later this summer and is skeptical about the appropriateness of allowing corporations and institutions access to crypto markets.
Politicians in South Korea have been advocating for the approval of spot Bitcoin ETFs, following the lead of Washington. However, the regulators, including Kim, are not as enthusiastic about this move and prefer to wait and see how the United States’ decision pans out before taking any action. Kim highlighted the need for more discussion on crypto regulation, emphasizing that virtual assets should not be seen as conventional financial products. He also dismissed the idea that crypto could replace fiat currency entirely, citing the difficulty in viewing virtual assets as a viable form of currency.
Kim’s cautious approach towards corporate crypto investments and spot Bitcoin ETF approval aligns with his belief in prioritizing the stability of the financial market and considering the impact on financial institutions. He believes that virtual assets issued by the private sector cannot completely replace legal tender issued by central banks and that it is important to stabilize the financial market before introducing any new regulations. Lawmakers in the National Assembly pressed Kim for more details on his stance on crypto regulation, to which he responded by emphasizing the necessity of additional discussions on regulatory measures related to virtual assets.
In light of South Korea’s first law designed to protect cryptocurrency investors coming into effect recently, there is a growing focus on regulating the crypto market in the country. Kim Byung-hwan’s upcoming role as the head of the Financial Services Commission (FSC) will likely bring more insights into the government’s approach to cryptocurrency regulation. While there is pressure from lawmakers to approve corporate crypto investments and spot Bitcoin ETFs, Kim’s cautious stance suggests a more conservative approach that prioritizes investor protection and financial market stability. As the regulatory landscape continues to evolve, further discussions and considerations on virtual asset regulations are expected to shape South Korea’s stance on crypto in the future.
