This year, South Korea welcomed two important new leaders in the financial sector—new President Lee Jae Myung and the new chairman of the Financial Services Commission (FSC), Lee Eok-won. However, their positions on cryptocurrency are in stark contrast.
In a hearing in September this year, Lee Eok-won clearly expressed a cautious attitude towards cryptocurrency—he believes that cryptocurrencies lack intrinsic value, unlike traditional financial products such as deposits and stocks, and their high volatility makes it difficult for them to fulfill the core functions of money, including value storage and medium of exchange.
Lee Eok-won also holds reservations about pension funds and retirement funds investing in crypto assets, pointing out that market volatility and speculative risks could pose a threat to the safety of long-term funds. Regarding the approval of a spot Bitcoin ETF, he acknowledged that there are differing expectations and concerns among various parties and stated that South Korean authorities will decide on the implementation method and timeline based on thorough consultations with the National Assembly and by referencing international regulatory trends.
Notably, Lee Eok-won has a positive attitude towards the regulation of stablecoins, emphasizing that adequate supplementary measures should be taken while ensuring financial safety, and leaving room for innovation. This shows his policy orientation of seeking a balance between financial innovation and risk control.
From 2017 to 2021, similar views of "lack of intrinsic value" were common among figures such as Bank of England Governor Andrew Bailey and JPMorgan CEO Jamie Dimon, but with the popularity of cryptocurrencies, this rhetoric has shifted.
An executive from blockchain data service provider Xangle publicly criticized Lee Eok-won's remarks, bluntly stating that his views "stem from ignorance and a lack of understanding." The executive pointed out that some traditional investors question the intrinsic value of cryptocurrencies while holding stocks in companies like Apple, highlighting a double standard that deserves reflection.
He cited the example of payment giant PayPal and blockchain platform Hyperliquid, emphasizing the similarities in their repurchase behaviors. Hyperliquid conducted a token buyback of up to $1.5 billion from its own revenue this year, akin to the stock buyback practices of traditional listed companies. Further examples include Tron generating $430 million in revenue over a recent period, Ethena producing $68 million, and Pump.fun $42 million, while Ethereum contributed $15 million. These figures indicate that mainstream blockchain projects also possess actual value creation capabilities.
In stark contrast to Lee Eok-won's cautious stance, President Lee Jae Myung has actively promoted cryptocurrency-friendly policies since taking office in June, aiming to make South Korea a global center for digital asset innovation. During his campaign, Lee Jae Myung promised to support the development of the crypto industry, including legalizing spot cryptocurrency ETFs, allowing national pension funds and other institutions to invest in crypto assets, and promoting the issuance of a Korean won stablecoin.
After taking office, he quickly fulfilled his promises by proposing the Digital Asset Basic Act, aimed at regulating the digital asset market. Additionally, the Lee Jae Myung government established a dedicated crypto policy task force to promote relevant legislative processes and plans to pass "pro-Bitcoin" laws by the end of this year to further clarify the investment status of cryptocurrencies like Bitcoin.
This leadership pattern of "friendliness and caution coexisting" brings uncertainty to the development of South Korea's crypto market and has sparked widespread discussion within the industry regarding policy direction and investment environment.
Overall, South Korea still maintains a cautious attitude towards cryptocurrencies and virtual assets.
In July this year, the Financial Supervisory Service (FSS) of South Korea issued guidance requiring domestic companies to limit their exposure to cryptocurrency-related stocks in ETF portfolios, including stocks of companies like Coinbase and Strategy. Subsequently, in August, the FSC issued a new round of administrative guidance to exchanges, requiring them to stop allowing users to engage in lending activities using cryptocurrencies or fiat currencies.
Despite the tightening regulatory environment, interest among South Korean retail investors in crypto assets remains high.
Data shows that in August, South Korean investors net sold Tesla stocks amounting to $657 million, the largest outflow since the beginning of 2023. Some of the funds shifted to more volatile cryptocurrency alternatives, such as Bitmine Immersion Technologies, which attracted a net inflow of $253 million that month. Meanwhile, data from the Korea International Financial Center indicates that the average monthly purchase amount of retail investors in large U.S. tech companies has dropped from $1.68 billion from January to April to $260 million in July.
Currently, the number of users on South Korean cryptocurrency exchanges has exceeded 16 million, meaning that over 30% of South Korea's population is participating in cryptocurrency trading. Eli Ilha Yune, Chief Product Officer of quantum machine learning startup Anzaetek, stated at a previous crypto event that the reason for the South Korean public's fervor for the crypto industry is not due to a belief in Web3, but rather because many young people are forced to seek "quick money-making" avenues due to economic difficulties.
In summary, South Korea's policy direction in the cryptocurrency field reflects a "tension of institutional reconstruction." The pro-crypto stance of the Lee Jae Myung government aims to seize the global competitive high ground in digital finance through institutional innovation and market openness; while the regulatory system led by Lee Eok-won represents a continuation of South Korea's traditional financial governance logic—emphasizing stability, controllability, and the priority of public interest.
This policy dichotomy may not simply be a matter of "radical versus conservative" opposition, but rather an institutional exploration of how to coexist with risk and innovation during South Korea's digital economic transformation process. In the short term, this divergence may lead to increased regulatory uncertainty and fluctuating market expectations, but in the long run, it may encourage South Korea to form a more mature digital asset governance framework, finding a sustainable balance between financial security and technological innovation.
Related: South Korea intensifies cryptocurrency seizure efforts, targeting cold wallets
Original: “Pro-crypto president vs cautious regulators: South Korea's policy divide”
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
