Korean regulator head has rejected the idea of creating a BTC reserve in the near future

What’s new? South Korea’s Financial Services Commission (FSC) Chairman Kim Byung-hwan has rejected the idea of creating a national bitcoin reserve in the near term. Korea intends to observe the reaction of other countries to Donald Trump’s plans to introduce cryptocurrencies before moving to take active steps in this direction.

Material by News Prime

What else is known? “The level to which we will foster [the crypto industry] in the future will ultimately be a matter of judgment. It will be based on whether other countries’ stances change due to US government policy. We aren’t anywhere near a move to [build a Bitcoin reserve] at the moment,” the official explained in an interview with local television.

The FSC head also added that the regulator’s opinion on the matter will also be influenced by conditions in the domestic market. Right now, the commission’s priority remains to develop reliable ways to protect local crypto investors, and it will take time to consider keeping bitcoin as a reserve asset.

According to the official, the FSC, without properly studying the issue, cannot claim that investing in bitcoin and other cryptocurrencies will have a positive impact on the country’s economy, unlike investing in the stock market, which creates a favorable environment.

“Crypto asset prices are rising rapidly in a short period of time and the market itself is highly volatile. […] We are in a situation where we are trying to strike a balance, considering whether to foster [the industry] or focus on protecting investors. […] For now, our priority is working out how to connect this market to the existing financial system and how to establish a relationship with it,” Kim Byung-hwan emphasized.

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According to the official, the FSC was previously an opponent of the mass introduction of cryptocurrencies because of their danger. However, the agency’s position changed with the adoption of the law on the protection of crypto investors in July this year. On the day the law came into force, the FSC launched its own crypto transaction monitoring system to track fraud in the market.

In general, the FSC has a reputation as a strict regulator. For example, the commission did not approve the launch of crypto exchange-traded funds (ETFs) in the local market. However, a digital asset advisory panel was formed in October to consider, among other things, whether to ban crypto ETFs.

The idea of creating a national bitcoin reserve in the United States was announced by President-elect Donald Trump during his election campaign. In addition, back in July, Republican Senator Cynthia Lummis from the state of Wyoming introduced a bill to create a strategic BTC reserve to reduce the national debt.

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The head of Bitcoin Magazine David Bailey claimed Trump would be able to purchase bitcoins worth tens of billions of dollars even without congressional approval.

In turn, Avik Roy, the president of the Foundation for Research on Equal Opportunity, a non-profit think tank, said that the Lummis bill alone will not solve the national debt problem completely, it will also require budget forms.