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- South Korea’s financial authority has expressed reservations about cryptocurrencies being recognized as a financial asset
- Koh Seung-beom, who may be the next Chairman of the Korean Financial Services Commission (FSC), has expressed reservations about cryptocurrency’s value
- The candidate, according to the article, has maintained the government’s refusal to recognize cryptocurrencies as a genuine asset class
Former central bank officials who have been nominated to lead South Korea’s financial watchdog have expressed reservations about cryptocurrencies being recognized as a financial instrument. Koh Seung-beom affirmed his opinions on the topic accordingaccord towith those of international institutions in answers to a parliamentary committee.
Digital Assets: Are They Real Money?
Koh Seung-beom, who was nominated by the Korean President to be the next Chairman of the FSC, expressed his pessimism about cryptocurrencies’ ability to play a successful role in the economy. He concurred with the IMF’s assessment that virtual assets are not yet ready to be used as national currencies: Many market professionals, as well as international organizations such as the Group of 20 and the International Monetary Fund, find it difficult to regard virtual currencies as financial assets and believe they could not function as real currency.
Despite the IMF’s description of bitcoin and other altcoins as volatile and risky assets, they do have some advantages. They can help investors diversify their portfolios while also generating large gains. Digital currencies, according to the banking group, have a stronger chance of succeeding in countries with weak inflation and a wrecked economy.
El Salvador is a prime example of this type of country. In June, CryptoPotato revealed that the Latin American country had embraced Bitcoin as an official payment option within its boundaries.
In any event, Koh Seung-position beom’s aligns with that of the FSC’s current chief, Eun Sung-soo, who recently stated that cryptocurrencies with no intrinsic value are not real money.
South Korea’s Crypto Environment
The Asian country’s government considered issuing new restrictions for local cryptocurrency exchanges in June. By September, trading venues would be required to hold a real-name account with a local bank. Many tiny digital asset platforms were opposed to such restrictive rules. Some of their representatives planned to sue the Korean government, believing they had been discriminated against: Banks are refusing to start their cryptocurrency exchange verification processes for no apparent reason these days, and most exchanges are unable to demonstrate their worth.
The FSC, on the other hand, maintained its quest for trading venues that do not have the requisite licenses. During the watchdog’s examination in early August, 11 of them apparently shut down. Many analysts predicted that such a scenario may occur because most exchanges — with the exception of local giants Bithumb, UPbit, Coinone, and Korbit – failed to register real-name accounts for their customers.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
