Lee Eok-won, the nominee for chairman of South Korea’s Financial Services Commission (FSC), openly criticized cryptocurrencies in his responses to lawmakers ahead of his confirmation hearing, saying they have “extreme price volatility, lack monetary function and have no intrinsic value.”
Crypto Cannot Act Like Money, Says Lee
According to a report by News1, he explained that the unstable nature of crypto assets makes it hard to act like money. Lee said they cannot serve as a store of value or as a medium of exchange, which are basic roles that money is expected to play.
“virtual assets differ from traditional financial products like deposits and securities in that they have no intrinsic value,” Eok-won said, as he explains what he sees as a clear divide between digital tokens and regulated financial products.
Crypto Industry Disagress
Meanwhile, this comment quickly drew backlash from the crypto space. An anonymous crypto firm responded that “assets like Bitcoin have digital utility backed by blockchain security and transferability.”
The same official also said that it is misleading to say crypto has no value “when the US and global corporations are holding it as a strategic reserve” as it points to the way many companies already use digital assets to balance their sheets.
Lee also made it clear that he does not support the use of retirement or pension funds in crypto markets. He said that “given the high volatility and speculative nature of virtual assets, there is widespread concern” about risking people’s long-term savings in such uncertain markets.
On the subject of crypto exchange-traded funds (ETFs), he admitted there are “both expectations and concerns” but said that FSC would “review global regulatory trends” and will talk with lawmakers before deciding whether to allow local spot crypto funds.
Moreover, he was supportive when speaking about stablecoins. He said the FSC would “seek to create opportunities for innovation while ensuring adequate safeguards.” This comment shows that he is open to allowing growth in the area if proper safety measures are in place.
South Korea Fulfils Support for Stablecoin
This comes as eight major banks in South Korea confirmed that they are working on a won-backed stablecoin, which is an approach that President Lee Jae-myung supports. In July, the Ministry of SMEs and Startups also announced it would allow crypto businesses to qualify as venture companies again. This removed the restrictions that had been in place since 2018.
According to News1, South Korea remains one of the busiest crypto markets in the world, with over 16 million people registered on exchanges by March. This equals more than 30 percent of the country’s population.
Also Read: Stablecoins May Spark Costly Bailouts, Warns Economist Jean Tirole
