South Korea's Regulators Divided on Bitcoin Reserves

South Korean regulators and government ministries are at odds over the potential creation of strategic Bitcoin reserves, according to a senior lawmaker. The Democratic Party MP Ahn Do-geol highlighted that various government agencies hold differing positions on the matter of virtual asset reserves. Ahn urged Seoul to establish a crypto governance platform with minimal regulations to foster growth in the sector. He emphasized that the virtual asset market should be seen as a core component of the future financial industry, rather than a gambling den, and called for a system with minimal regulations to ensure investor protection.

Ahn suggested that regulators should focus on launching guidelines for security token issuers and introducing crypto spot ETFs. He also advocated for the introduction of fiat won stablecoins and boosting corporate and foreign involvement in the domestic market. Additionally, Ahn proposed the implementation of a tax system for domestic crypto traders to ensure the timely growth of the Korean virtual asset market. Ahn, who previously served as the Vice Minister of Strategy and Finance, noted that his former ministry, the Bank of Korea (BOK), the Financial Services Commission (FSC), the National Pension Service, and the Korea Investment Corporation all have differing stances on whether Seoul should start buying Bitcoin (BTC).

The Ministry of Strategy and Finance has adopted a wait-and-see approach, stating that the crypto sector is in a transitional period and that it plans to examine major trends and issues before taking action. The ministry also vowed to consider talking points raised by the Virtual Asset Committee, a government advisory body. The BOK, on the other hand, is more cautious about investing in virtual assets, citing high price volatility and the fact that they do not meet the IMF’s foreign exchange reserve requirements. The FSC has taken a different stance, noting the possibility of stockpiling digital assets and setting standards for crypto stockpiling. It has promised to closely monitor global trends and quickly establish a regulatory system for crypto in South Korea.

The National Pension Service has distanced itself from decision-making on this matter, stating that it has not yet reviewed investing in crypto as strategic assets and cannot form a position without a ruling from its fund management committee. The Korea Investment Corporation, South Korea’s sovereign wealth fund, has also stated that it will not act before Seoul establishes legal measures on BTC-buying. Both the pension service and the sovereign wealth fund have invested in BTC-related US stocks, buying shares in companies like Coinbase and MicroStrategy.