Financial Services Commission (FSC) Chairman nominee Koh Seung-beom opined that digital assets would not work successfully as financial instruments. He went further, stating they “could not function as a real currency.”
Are Digital Assets Real Money?
Koh Seung-beom – nominated by the Korean President to be the next Chairman of the FSC – expressed his skepticism regarding the successful role of cryptocurrencies in the economic system. He agreed with the International Monetary Fund’s opinion that virtual assets are not ready yet to serve as national currencies:
“International organizations, including the Group of 20 and the International Monetary Fund, as well as a lot of market experts, find it difficult to consider virtual currencies as a financial asset, and think they could not function as a real currency.”
Despite describing bitcoin and the altcoins as volatile and risky assets, the IMF added they have some benefits. They can diversify investors’ portfolios and bring significant profits. The financial organization pointed out that digital currencies have a better chance to succeed in countries with shaky inflation and a shattered economy.
El Salvador is a proper example of such a nation. As CryptoPotato reported in June, the Latin American country accepted the primary cryptocurrency as an official payment method inside its borders.
In any case, Koh Seung-beom’s stance coincides to some extent with the FSC’s incumbent chief Eun Sung-soo’s statement, who recently said that “cryptocurrencies, which have no intrinsic value, are not a real currency.”
Crypto Environment in South Korea
Back in June, the government of the Asian country contemplated issuing new rules for local cryptocurrency exchanges. It would require trading venues to have a real-name account at a local bank by September.
Many small digital asset platforms opposed such unfavorable regulations. Believing they have been discriminated against, some of their representatives even intended to sue the Korean government:
“These days banks are refusing to initiate their cryptocurrency exchange verification processes without clear reasons, and most exchanges are failing to get a chance to prove themselves.”
However, the FSC continued its mission to hunt down trading venues that operate without the necessary licensing. At the beginning of August, 11 of them reportedly shut down amid the watchdog’s inspection. Many experts predicted that such a scenario is possible as most of the exchanges – except the local giants Bithumb, UPbit, Coinone, and Korbit – failed to open real-name accounts for clients.