A former central bank official, appointed as head of South Korea’s financial watchdog, has expressed skepticism about the recognition of cryptocurrency as a financial asset. In comments to a parliamentary committee, Koh Seung-beom confirmed that his views on the issue were in line with that of international institutions.
Korean financial regulator candidate says crypto is not currency
Koh Seung-beom, who could become the next chairman of the Korea Financial Services Commission (FSC), shared doubts about the cryptocurrency’s value as a financial asset and its monetary status. On Wednesday, he was quoted by the Korea Herald as saying:
International organizations, including the Group of 20 and the International Monetary Fund, as well as many market experts, find it difficult to view virtual currencies as a financial asset and believe that they could not function as a real currency.
The comments were made in a written response to questions from the National Politics Committee of parliament in Seoul ahead of a confirmation hearing scheduled for Friday. Koh, a former member of the Bank of Korea’s rate-setting board, was nominated for the top FSC post by the Blue house August 5.
According to the report, the candidate reiterated the government’s rejection of calls to recognize cryptocurrencies as a viable asset class. Koh Seung-beom also indicated that his stance on cryptocurrencies is in line with the regulator’s current policy to tighten the rules for domestic crypto exchanges.
Earlier this year, outgoing FSC chairman Eun Sung-soo raised concerns about the crypto frenzy in South Korea. “Cryptocurrencies, which have no intrinsic value, are not real currency,” he said at a time when the digital coin trade was booming in the country.
Abundant liquidity amid the Covid-19 pandemic has pushed bitcoin (BTC) to 80 million won (over $ 71,000) in mid-April, the English-language daily noted. The Korean price was exceeding world rates, a phenomenon known as the “kimchi premium”.
South Korea has decided to implement stricter rules for its crypto trading sector. The revised law on special funds entered into force on March 25 and will be implemented in September after the expiration of the six-month grace period. It requires cryptocurrency exchanges to cooperate with national banks on issuing real name accounts and register with the Financial Intelligence Unit (FIU) under the FSC.
By the end of July, only 21 digital asset trading platforms had registered with the anti-money laundering body, the commission said. These include the four largest Korean exchanges – Bithumb, Upbit, Coinone and Korbit, while hundreds of smaller ones face closures. Last month, the FIU warned dozens of foreign exchanges to comply with the new regulations.
Do you think South Korean regulators will change their stance on cryptocurrencies in the future? Share your thoughts on the subject in the comments section below.
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