South Korea’s SEC Chair Nominee’s Cryptocurrency Comments Spark Major Debate

Lee Eok-won, the chairman candidate of South Korea’s Financial Services Commission (FSC), has sparked controversy by arguing that cryptocurrencies have no intrinsic value.

Lee’s comments were contained in written responses submitted before he took office as head of the country’s top financial regulator.

Lee stated that cryptocurrencies, due to their high price volatility, cannot fulfill the basic functions of a currency: store of value and medium of exchange. He also opposed pension and investment funds investing in crypto assets, arguing that the speculative nature of the market poses risks.

However, these statements were met with criticism from local crypto industry representatives, who described Lee’s comments as “reactionary,” especially at a time when many governments and companies are incorporating crypto into their balance sheets. Some blockchain experts, however, argued that Bitcoin and other cryptocurrencies have “digital benefits,” such as security and ease of transfer.

Lee stated that he takes a more balanced stance on stablecoins, saying he aims to balance innovation opportunities with security measures.

South Korea is working on plans to regulate a local currency-pegged stablecoin market. This move parallels similar initiatives in regions like Japan, Hong Kong, and China, and is considered part of the countries’ strategy to maintain their monetary sovereignty in the Web3 era.

*This is not investment advice.