- South Korea urged caution on spot Bitcoin ETFs, prioritizing financial stability and regulatory review.
- Kim Byung-hwan emphasizes investor protection over market development in cryptocurrency policy.
Kim Byung-hwanthe candidate for chairman of the Financial Services Commission (FSC), expressed caution about allowing companies to invest in cryptocurrencies.
Kim’s comments were made during a confirmation hearing in the National Assembly’s Political Affairs Committee on July 22.
Why is Kim cautious about BTC ETFs?
Kim Byung-hwan, who will succeed FSC Chairman Lee Bok-hyun later this summer, addressed the issue by responding to a survey by a Democratic Party lawmaker, saying:
“I am cautious about approving the launch of [crypto] accounts for companies and institutions. Given the confusion we’ve seen in the [crypto] market in the past, current policies should focus on investor protection [rather than market development].”
Despite pressure from lawmakers on the FSC to approve spot Bitcoin [BTC] For ETFs like those in Washington, regulators recommended a more cautious approach.
They recommended waiting to see the results of U.S. actions before making a decision, and expressed a cautious attitude toward the introduction of spot BTC ETFs in South Korea.
He also stated that virtual assets should not be considered currencies or financial products, saying:
“It is difficult for virtual assets arbitrarily issued by the private sector to completely replace the role of legal tender issued by the central bank, and it is difficult to regard virtual assets as a means of payment.”
How will this benefit South Korea?
Curiously, this news comes amid recent actions by South Korea’s financial security regulator, which on July 19 introduced long-awaited measures to protect users interacting with virtual asset service providers (VASPs).
Notably, this step by the South Korean financial authorities differs from the aggressive steps taken by international regulators.
This is because they do not consider virtual assets suitable as underlying assets for ETFs, leading to a ban on new listings and brokerage services.
Therefore, they believe that the decisions on spot ETFs will prioritize the stability of financial markets and the potential impact on financial institutions.
This highlights that officials focus more on regulation than on market expansion, with an emphasis on user protection and maintaining market order.
Naturally, they emphasize the need for further regulatory discussions, especially regarding the access and activities of virtual asset providers.
That said, Kim summed it all up best when he said:
“I think we should prioritize protecting users and maintaining market order, and first review the regulations on access and business practices of virtual asset operators.”