South Korean Regulators and Government Ministries Are Currently Grappling with Divergent Views Regarding the Establishment of Strategic Bitcoin Reserves

South Korean regulators and government ministries are currently grappling with divergent views regarding the establishment of strategic Bitcoin reserves

Democratic Party MP Ahn Do-geol has revealed that Korean regulators and government ministries have divergent views on setting up strategic Bitcoin reserves, according to a report by Block Korea.

Ahn, the former Vice Minister of Strategy and Finance, said that "every government agency has a different position on virtual asset reserves," complicating the potential for a cohesive national approach.

Ahn urged the government to create a crypto governance platform with "minimal regulations" to spur growth in the virtual asset market.

"We should no longer view the virtual asset market as a gambling den, but as a core component of the future financial industry," he said. "We must quickly create a system replete with minimum regulations to ensure investor protection."

The lawmaker suggested that regulators should focus on several key areas, including setting guidelines for security token issuers and introducing crypto spot ETFs. Ahn also advocated for the implementation of fiat won stablecoins to boost corporate and foreign participation in the domestic market.

He added that establishing a tax system for local crypto traders would be crucial for ensuring "the Korean virtual asset market takes off on time."

This analysis follows statements from various governmental bodies expressing differing stances on the establishment of Bitcoin reserves.

The Ministry of Strategy and Finance has adopted a wait-and-see approach, stating that the crypto sector is undergoing "a transitional period" and it "plans to examine major trends and issues." It also mentioned plans to discuss matters raised by the Virtual Asset Committee, a government advisory body linked to the Financial Services Commission (FSC).

However, the Bank of Korea (BOK) has taken a more cautious position, publicly stating its reluctance to invest in cryptocurrencies due to them "not meeting the IMF's foreign exchange reserve requirements."

The BOK officials expressed concerns over the "high price volatility" of Bitcoin and other tokens, which may not align with the objectives of managing foreign exchange reserves.

In contrast, the FSC appears more open to the potential of Bitcoin, referencing reports from the Virtual Asset Committee that discuss "the possibility of stockpiling digital assets" and setting related standards. It has committed to closely monitoring global trends and quickly establishing a regulatory system for crypto assets in South Korea.

Meanwhile, the National Pension Service has distanced itself from this contentious debate, stating that it has not yet reviewed investing in [crypto] as strategic assets. The service noted it could not take a definitive position without a ruling from its fund management committee.

Korea Investment Corporation, the country's sovereign wealth fund, added that it would abstain from any actions regarding Bitcoin until legal measures for BTC purchasing are established by the government.