South Korea FSC Nominee Lee Eok-won Skeptical on Crypto as 16M Citizens Trade Digital Assets

TLDR

• FSC nominee Lee Eok-won said crypto has no intrinsic value due to volatility.

• He opposed using pension funds for crypto citing speculative market risks.

• Lee expressed cautious support for South Korea’s stablecoin development plans.

• Crypto adoption in South Korea has reached over 16 million exchange users.

South Korea’s nominee to chair the Financial Services Commission (FSC), Lee Eok-won, has stated that cryptocurrencies lack intrinsic value and cannot serve as money. His remarks have drawn criticism from industry participants at a time when the country’s youth are increasingly turning to digital assets.

Remarks on volatility and value

According to News1, Lee submitted written responses ahead of his confirmation hearing in which he dismissed the role of cryptocurrencies. He wrote that “crypto has extreme price volatility, lacks monetary function and has no intrinsic value.”

Lee explained that such volatility prevents cryptocurrencies from functioning as a store of value or medium of exchange.

He said digital assets differ from deposits and securities, which are backed by tangible or regulated foundations. His comments follow years of debate in South Korea about how to balance innovation with investor protection.

Industry criticism of the stance

Local industry figures expressed frustration at the remarks. An official at a South Korean crypto company, quoted by News1, argued that “assets like Bitcoin have digital utility backed by blockchain security and transferability.” The official added that global firms holding crypto as a reserve contradict the claim that it has no value.

Critics suggested that dismissing cryptocurrencies outright may ignore their growing role in financial markets. While regulators have focused on risks, industry voices maintain that blockchain technology provides functional utility that supports value.

Lee also opposed using retirement or personal pension funds to invest in digital assets. He said, “given the high volatility and speculative nature of virtual assets, there is widespread concern about using retirement or personal pension funds.” He emphasized that such savings should prioritize stability rather than speculative returns.

On cryptocurrency exchange-traded funds, Lee noted that there are “both expectations and concerns.” He said the FSC would review global regulatory approaches before determining whether and how to introduce local crypto ETFs. His remarks suggest caution while leaving room for further discussion with lawmakers.

Stablecoins and regulatory direction

Lee adopted a different tone on stablecoins, saying that the FSC would “seek to create opportunities for innovation while ensuring adequate safeguards.”

South Korea has been advancing plans for a won-backed stablecoin, with eight major banks working on a joint project. The initiative follows President Lee Jae-myung’s campaign pledges to expand the role of digital assets in the economy.

Authorities are also preparing to reclassify crypto-related businesses as venture companies, reversing a 2018 restriction. This would allow more firms in the sector to access investment support and preferential treatment typically given to startups.

Rising youth demand for crypto

Lee’s comments come as crypto adoption in South Korea continues to grow rapidly. Government data from March showed that more than 16 million people in the country had registered exchange accounts, representing over 30% of the population.

Analysts say that much of this demand is driven by younger generations facing limited economic opportunities. At a June event, Eli Ilha Yune, chief product officer at Anzaetek, said many young Koreans are motivated by financial pressures. “The motive comes not from a belief in Web3 like in the West, but from desperation to make quick money,” he said.

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