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- FSC nominee Lee Eok-won dismisses crypto as lacking intrinsic value.
- Pension fund investments in crypto face regulatory resistance.
- Despite criticism, 16M South Koreans actively use crypto exchanges.
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South Korea’s cryptocurrency sector is facing renewed uncertainty after Lee Eok-won, nominee for chairman of the Financial Services Commission (FSC), made strong critical statements about digital assets. Lee, who is set to undergo a confirmation hearing, argued that cryptocurrencies lack intrinsic value and cannot function as reliable financial instruments.
Lee’s Critical Stance on Crypto
In written responses to lawmakers, Lee described cryptocurrencies as “extremely volatile” with “no monetary function or intrinsic value.” He emphasized that, unlike deposits or securities, digital assets should not be considered traditional financial products. His comments triggered immediate pushback from industry insiders, who argue that major corporations globally — including U.S. firms — treat Bitcoin and other cryptocurrencies as strategic reserves.
An anonymous South Korean crypto executive told News1 that dismissing Bitcoin’s value ignores its blockchain-backed security and utility as a transferable digital asset.
Policy Outlook: ETFs, Stablecoins, and Pensions
Lee also voiced opposition to allowing pension funds to invest in cryptocurrencies, citing concerns over exposing retirement savings to extreme volatility. On crypto exchange-traded funds (ETFs), however, he acknowledged “both expectations and concerns,” pledging that the FSC will monitor global regulatory developments before deciding on domestic approval.
When it comes to stablecoins, Lee adopted a more balanced tone, signaling potential support for innovation alongside safeguards. His remarks align with recent developments, as eight major South Korean banks are reportedly exploring a won-backed stablecoin project.
Also Read: South Korea’s Bithumb Slashes Loan Caps, Halves Leverage in Crypto Lending Overhaul
Rising Adoption Amid Generational Pressure
Despite regulatory skepticism, crypto adoption in South Korea continues to climb. Over 16 million residents — more than 30% of the population — are now registered crypto exchange users. Analysts suggest that this surge is fueled less by Web3 enthusiasm and more by financial desperation among the younger generation, who increasingly turn to digital assets as a path to quick returns.
Lee’s nomination and outspoken criticism of cryptocurrencies could shape South Korea’s regulatory trajectory at a critical time for the industry. While his remarks cast doubt on crypto’s role in pensions and mainstream finance, his openness to stablecoin innovation suggests the FSC may pursue a cautious but not entirely hostile path. The outcome of his confirmation and subsequent policies will be closely watched by both local investors and global crypto markets.
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Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
