South Korea FSC Chief Nominee Under Fire for Calling Crypto Worthless
South Korea’s Monetary Providers Fee (FSC) chief nominee Lee Eok-won is dealing with criticism from the crypto group following his assertion that cryptocurrencies are nugatory.
In written responses submitted forward of his affirmation listening to, Lee said that cryptocurrencies lack intrinsic worth, not like conventional monetary merchandise equivalent to deposits and equities.
Lee argued that cryptocurrency volatility prevents them from fulfilling important capabilities of a foreign money, together with serving as a retailer of worth or a medium of alternate.
South Korea FSC Nominee Sparks Outrage With “Anti-Crypto” Stance
This place aligns with the South Korean authorities’s stance that digital belongings lack intrinsic worth and can’t be labeled as a foreign money or a monetary product.
Lee additionally expressed reservations about pension and retirement funds investing in crypto belongings, citing considerations about market volatility and hypothesis.
Concerning the approval of a spot Bitcoin ETF, Lee acknowledged the various expectations and considerations about its affect, stating that Korean authorities will think about international regulatory tendencies earlier than figuring out implementation strategies and schedules in session with the Nationwide Meeting.
Nonetheless, Lee indicated assist for stablecoin regulation, promising “ample supplementary measures whereas creating alternatives for innovation.”
Below President Lee Jae-myung’s endorsement, South Korea is developing regulations for local-currency-pegged stablecoins.
The digital asset trade, nonetheless, has criticized Lee’s stance as outdated.
Comparable “no intrinsic worth” arguments have been frequent amongst figures like Financial institution of England Governor Andrew Bailey and JPMorgan CEO Jamie Dimon from 2017 to 2021, however at the moment are thought of inappropriate given the elevated adoption of cryptocurrencies.
An govt at Xangle, a blockchain knowledge service supplier, specifically criticized Lee Eok-won’s assertion as one born out of “ignorance and a lack of awareness”.
The chief famous that crypto critics usually maintain conventional shares, equivalent to Apple, whereas questioning the intrinsic worth of crypto.
He in contrast the normal cost infrastructure of PayPal to the blockchain platform Hyperliquid, mentioning that Hyperliquid performed $1.5 billion in token buybacks this yr from income generated, much like inventory buybacks by PayPal and Apple.
He added that in simply the previous month, main initiatives like Tron generated $430 million, Ethena $68 million, and Pump.enjoyable $42 million, and Ethereum $15 million, that are a testomony to the worth they create.
South Korean Authorities Tightens Grip on Crypto Adoption
Nonetheless, it seems that South Korea as a complete stays cautious about crypto and digital belongings.
In July, the Monetary Supervisory Service (FSS) issued guidance directing home companies to restrict their publicity to crypto shares, together with these of Coinbase and Technique, in ETF portfolios.
The directive reinforces the South Korean 2017 administrative guidance on digital currencies, which restricts monetary establishments from holding, buying, or investing in digital belongings.
Equally, in August, the South Korean FSC issued recent administrative guidance to exchanges, instructing them to halt operations that permit customers to borrow towards cryptocurrencies or fiat deposits.
Regardless of regulatory warning, South Korean retail traders are exhibiting rising curiosity in crypto.
Korean investors sold a web $657 million of Tesla inventory throughout August, the biggest outflow since early 2023, whereas pivoting towards crypto investments amid disillusionment with the electrical automobile maker.
In accordance with Bloomberg, South Korean traders now favor unstable crypto proxies, equivalent to Bitmine Immersion Applied sciences, which attracted $253 million in web inflows in August.
Knowledge from the Korean Center for International Finance present that retail traders lowered their purchases of U.S. large tech corporations from a month-to-month common of $1.68 billion (January-April) to $260 million in July.
It’s nonetheless unclear whether or not President Lee Jae-myung’s administration will grant the desires of those that are prepared to simply accept the dangers related to crypto belongings by opening doorways by way of crypto reforms that would facilitate South Korea’s participation within the digital asset sector.
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