Lee Eok-won, the nominee to move South Korea’s Monetary Providers 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 stated digital property don’t possess intrinsic value in the identical approach as equities or financial institution deposits, and argued that their worth swings undermine their means to behave as cash. He additional acknowledged that the intense volatility skilled by digital property 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 property are neither authorized tender nor monetary merchandise below 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 might be managed with safeguards whereas leaving room for innovation.
Business pushback
The nation’s blockchain sector rejected the remarks, with many within the business arguing that the assertion ignores the income and adoption being generated throughout the business.
Since 2022, crypto adoption in South Korea has surged from about 9.7 million traders 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 property have quickly turn out to be a mainstream funding selection for South Koreans.
An analyst at Xangle, a neighborhood knowledge agency, accused Lee of counting on outdated arguments as soon as frequent amongst conventional finance leaders.
He pointed to latest token buybacks and income streams from platforms like Hyperliquid, Tron, and Ethena as proof of worth creation similar to company inventory buybacks.
Coverage warning vs. retail demand
South Korean regulators have strengthened restrictions in latest months as retail curiosity continues to climb within the nation.
The Monetary Supervisory Service suggested home asset managers to reduce holdings in crypto-related shares, whereas the FSC ordered exchanges to cease offering lending companies backed by digital property or fiat deposits.
Regardless of the tighter stance, retail enthusiasm for crypto continues to climb. Buyers bought off a whole bunch of thousands and thousands of {dollars}’ value 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 traders depart open questions on how President Lee Jae-myung’s administration will stability warning with the general public’s rising urge for food for digital property.