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S. Korea Not to Allow Bitcoin Transactions within the Institutional System
Confirming Conservative Stance
S. Korea Not to Allow Bitcoin Transactions within the Institutional System
  • By Yoon Yung Sil
  • December 12, 2017, 00:15
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Financial Services Commission (FSC) Chairman Choi Jong-ku stressed that the FSC will never approve exchanges of crytocurrencies nor introduce futures trading of them in a luncheon meeting with reporters in Seoul on Dec. 11.
Financial Services Commission (FSC) Chairman Choi Jong-ku stressed that the FSC will never approve exchanges of crytocurrencies nor introduce futures trading of them in a luncheon meeting with reporters in Seoul on Dec. 11.

 

“I don't see bitcoin transactions as financial deals," Financial Services Commission (FSC) Chairman Choi Jong-ku said in a luncheon meeting with reporters in Gwanghwamun, Seoul, on December 11. "When they are considered financial deals, they can create various problems. So, they cannot be counted as institutionalized transactions. Naturally, the authorities never allow futures trading of such currencies." This is in stark contrast to the fact that the bitcoin futures have begun trading on a major exchange in the U.S., entering the institutional market in eight years after the launch.

He also said “(The government regulations) focus on minimizing side effects of bitcoin transactions and reducing indiscriminate speculative investment.”

Choi stressed that the FSC will never approve exchanges nor introduce futures trading. In regard to some views that the government has conservative stance on bitcoin compared to the U.S. or Japan, he said, “In the U.S., the history of futures trading began from private companies. However, we have a different start as derivative product trading is specified in the law. Does it any good to our economy when we approve bitcoin transactions? There will have no good effects on our economy, but side effects, at this time, except for exchanges that earn a commission and investors that make a marginal profit.”

Choi added, “The government is discussing measures to restrict the transactions to some extent, including an all-out ban. The Ministry of Justice (MOJ) wants a total ban on bitcoin transactions but there should be a legal basis in order to do that. There are also questions if it is ok to unilaterally put regulations leaving other things out of consideration.” In a way, he seemed to have a different view from the MOJ which takes a strong stand against digital currency regulations. Choi also said, “We are very cautious about the issue because we can’t predict the future but we still believe that we’d better put regulations on it.”

FSC Vice Chairman Kim Yong-beom said, “The FSC thinks that institutional financial companies cannot join in any transactions related to virtual currencies. Many financial institutions have asked to approve cryptocurrency exchanges as additional banking business so far but we haven’t allowed it.”

He emphasized, “The price of virtual currencies rises because of the expectation that the next person will buy it at the desired price and this is quite like a Ponzi scheme.”