Financial Services Commission (FSC) President-designate Koh Seung-beom has argued that digital assets will not work successfully as financial instruments. He went further, declaring that they “could not function like real money”.

Are digital assets real money?

Koh Seung-beom – appointed by the Korean president to be the next FSC chairman – has expressed skepticism about the successful role of cryptocurrencies in the economic system. He agrees with the International Monetary Fund that virtual assets are not yet ready to serve as national currency:

“International organizations, including the Group of 20 and the International Monetary Fund, as well as many market experts, find it difficult to view virtual currencies as a financial asset and believe that they could not function as a real currency. . “

Despite the description of bitcoin and altcoins as volatile and risky assets, the IMF added that they have certain advantages. They can diversify investor portfolios and generate significant profits. The financial organization stressed that digital currencies have a better chance of succeeding in countries with fragile inflation and broken economies.

El Salvador is a good example of such a nation. As CryptoPotato reported in June, the Latin American country accepted the main cryptocurrency as an official payment method within its borders.

In any case, Koh Seung-beom’s position coincides to some extent with the statement of outgoing FSC chief Eun Sung-soo, who recently said that “cryptocurrencies, which have no intrinsic value, do not are not a real currency ”.

Crypto environment in South Korea

In June, the Asian country’s government planned to release new rules for local cryptocurrency exchanges. Trading venues should have a real-name account at a local bank by September.

Many small digital asset platforms have opposed such unfavorable regulations. Believing that they had been discriminated against, some of their representatives even intended to sue the Korean government:

“Banks these days refuse to initiate their verification processes for cryptocurrency exchanges without clear reasons, and most exchanges don’t have a chance to prove themselves.”

However, the FSC has continued its mission of tracking down trading platforms that operate without the necessary licenses. At the beginning of August, 11 of them would have closed their doors during the inspection of the guard dog. Many experts have predicted that such a scenario is possible because most exchanges – with the exception of local giants Bithumb, UPbit, Coinone, and Korbit – have failed to open real-name accounts for customers.