Amid growing debates over the viability of strategic Bitcoin reserves, South Korea finds itself at an impasse. Different government bodies and regulators in the country have conflicting opinions on adopting Bitcoin as a national strategic reserve, an influential politician recently revealed.
Democratic Party Representative Ahn Do-geol highlighted the lack of consensus among agencies, indicating that “each government agency has a different position on virtual asset reserves.” This division reflects the complexity and uncertainty that still surrounds the cryptocurrency market.
Ahn is a proponent of creating a minimalist regulatory infrastructure for cryptocurrencies, arguing that this could transform the virtual asset market into a key pillar of the future financial industry. “The virtual asset market should no longer be seen as a gambling den, but as an essential component of the future financial industry,” Ahn said.
Furthermore, the lawmaker suggested that Seoul should facilitate the implementation of spot cryptocurrency ETFs and introduce won-backed stablecoins. He also advocates for greater corporate and foreign participation in the South Korean cryptocurrency market, as well as a tax system tailored to crypto traders.
In contrast, the Bank of Korea (BOK) and the Ministry of Strategy and Finance have taken a more cautious stance. The BOK has expressed reservations about aligning virtual assets with international foreign exchange reserve standards, citing “high price volatility” as a deterrent. The Ministry of Strategy and Finance, for its part, has opted for a “wait-and-see” approach, planning to “examine major trends and issues” before making any decisions.
The Financial Services Commission (FSC), on the other hand, is more open to the possibility of incorporating digital assets into national reserves, promising to “closely monitor global trends” and quickly develop a regulatory system for cryptocurrencies.
These internal disagreements reveal the delicate balance governments must maintain when navigating the new and dynamic cryptocurrency landscape. The stance of the National Pension Service and the Korea Investment Corporation also echo this caution, with both waiting for clearer legal definitions before making a definitive statement on Bitcoin investment.