 ▲ Bitcoin (BTC) |
The financial authorities' decision to suspend domestic securities firms' brokerage of Bitcoin spot exchange-traded funds (ETFs) listed on the U.S. stock market is expected to ignite discussions in Korea over whether to recognize Bitcoin as an 'asset group'.
It is pointed out that the financial investment industry also needs to review the restriction of Bitcoin spot ETFs based on government measures six years ago, when there was a strong negative perception of Bitcoin.
According to the financial industry on the 14th, the authoritative interpretation of the domestic ban on brokerage of 11 U.S. Bitcoin spot ETFs is based on the 'Emergency Measures Related to Virtual Currencies' put forward by relevant ministries led by the Office for Government Policy Coordination in December 2017. This measure is in the nature of a comprehensive government measure against “overheated speculation in virtual currencies and criminal activities using virtual currencies.”
At the time, the Financial Services Commission and the Financial Supervisory Service stated, "To prevent new investments in virtual currencies by institutional financial companies from stimulating speculative sentiment, the holding, purchase, acquisition of collateral, and equity investment in virtual currencies by financial institutions is prohibited," and this regulation continues to this day. It's coming.
The period from late 2017 to early 2018, when this measure was announced, was the time of the ‘Bitcoin craze’. There was a strong perception that Bitcoin was a means of hiding criminal profits using anonymity, and as people of all ages and genders began investing with large sums of money, the view that it was a 'target of speculative speculation' became prevalent.
Former Roh Moo-hyun Foundation Chairman Yoo Si-min's statement that "Bitcoin is a fraud" and former Justice Minister Park Sang-ki's comment suggesting the closure of virtual asset exchanges (the so-called "Park Sang-ki's Rebellion") also occurred during this period.
As the government has previously shown a hardline attitude toward digital assets, the industry's view is that the fact that some securities companies, such as KB Securities, preemptively banned new purchases of Bitcoin futures ETFs was also a result of past learning.
An official at a securities company said, “Virtual assets are in a gray area under the Capital Market Act, so there are many ambiguous laws and authorities are telling us not to even talk about Bitcoin, so the industry is also reluctant.”
Financial authorities are also concerned that funds from the capital market, which plays a role in financing companies through stocks and bonds, are flowing into the virtual asset market.
Another industry official said, "From the authorities' perspective, there are concerns about an outflow of funds from the traditional capital market. The Korean capital market almost follows the United States, and the financial authorities are also closely watching the position of the U.S. Securities and Exchange Commission (SEC)." “SEC Chairman Gary Gensler’s statement also stated that Bitcoin would not be recognized as an asset class, so the authorities are following suit,” he explained.
In a statement on the 10th (local time), SEC Chairman Gary Gensler compared spot exchange traded products (ETPs) for raw materials such as precious metals and Bitcoin spot ETPs, saying, “The underlying assets of metal ETPs are used for consumption and industrial purposes, whereas Bitcoin is mainly used for consumption and industrial purposes.” “It is a speculative and highly volatile asset and is also used for illegal activities such as ransomware, money laundering, sanctions evasion, and terrorist financing,” he said. “We have approved the listing and trading of Bitcoin spot ETPs, but this does not approve or guarantee Bitcoin.” emphasized.
However, there is also a view that ignoring clearly existing investment demand in terms of asset allocation is not everything.
Bitcoin is free from government and power control, and the issuance volume is limited to 21 million. The ability to transmit around the world 24 hours a day and the ability to prove ownership without a third-party intermediary such as a bank are clearly advantages unique to Bitcoin that other traditional asset classes cannot match.
In fact, when the banking crisis arose due to the Silicon Valley Bank (SVB) incident in the United States in March last year, Bitcoin received attention as an alternative asset to the traditional financial system.
A senior official at an asset management company said, "Financial people in the institutional world believe that discussions are necessary because it is difficult to judge the valuation of Bitcoin, unlike stocks and bonds." “It’s definitely a positive impact,” he said.
Professor Cho Jae-woo of Hansung University said, “If a new asset class emerges and can bring positive changes to the corporate portfolio, I think we can accept it flexibly, if not actively,” and added, “If Bitcoin is a good asset class, it is a missed opportunity, and it is a bad asset class.” “It is right to leave the evaluation to the market,” he said.
