Lee Eok-won, the nominee to go South Korea’s Monetary Companies Fee, drew heavy criticism this week after dismissing crypto as missing any actual worth in his written testimony forward of affirmation hearings, native media reported on Sept. 1.
Lee mentioned digital belongings don’t possess intrinsic price in the identical manner as equities or financial institution deposits, and argued that their value swings undermine their capacity to behave as cash. He additional said that the intense volatility skilled by digital belongings makes them unsuitable as a retailer of worth or as a medium of change.
Lee’s place is according to the federal government’s view that digital belongings are neither authorized tender nor monetary merchandise beneath the monetary regulatory regime.
The FSC chair nominee warned in opposition to permitting retirement and pension funds to put money into the sector however expressed openness to regulating stablecoins, noting that they could possibly be managed with safeguards whereas leaving room for innovation.
Trade pushback
The nation’s blockchain sector rejected the remarks, with many within the trade arguing that the assertion ignores the income and adoption being generated throughout the trade.
Since 2022, crypto adoption in South Korea has surged from about 9.7 million buyers to greater than 16 million by early 2025, representing over 30% of the inhabitants and rising greater than 60% in simply over two years.
Buying and selling exercise on native exchanges has at instances exceeded inventory market volumes, and complete holdings have climbed above 102 trillion KRW ($70 billion), highlighting how digital belongings have quickly develop into a mainstream funding alternative for South Koreans.
An analyst at Xangle, an area knowledge agency, accused Lee of counting on outdated arguments as soon as frequent amongst conventional finance leaders.
He pointed to current token buybacks and income streams from platforms like Hyperliquid, Tron, and Ethena as proof of worth creation corresponding to company inventory buybacks.
Coverage warning vs. retail demand
South Korean regulators have strengthened restrictions in current months as retail curiosity continues to climb within the nation.
The Monetary Supervisory Service suggested home asset managers to cut back holdings in crypto-related shares, whereas the FSC ordered exchanges to cease offering lending companies backed by digital belongings or fiat deposits.
Regardless of the tighter stance, retail enthusiasm for crypto continues to climb. Traders bought off a whole bunch of hundreds of thousands of {dollars}’ price of Tesla inventory in August, the most important disposal since early final 12 months, whereas directing funds into crypto proxies like BitMINE, which not too long ago grew to become the largest Ethereum holder.
Information additionally confirmed a steep decline in South Korean purchases of main U.S. tech shares in contrast with earlier this 12 months.
The contrasting positions between regulators and buyers depart open questions on how President Lee Jae-myung’s administration will balance caution with the public’s growing appetite for digital belongings.
