South Korean FSC dismiss plans to build Bitcoin reserve ‘for the time being’

South Korea’s FSC remains cautious on digital assets following calls for domestic Bitcoin reserves after the US took a bullish stance on crypto.

According to a report by South Korean news outlet Newsprime, Financial Services Commission Chairman Kim Byung-hwan is responding to growing demands that South Korea begin creating a Bitcoin (BTC) reserve to secure the liquidity of digital assets.

“[A national Bitcoin reserve] It’s a bit of a distant story right now,” Kim said in a Nov. 24 interview.

He acknowledged that US President-elect Donald Trump has adopted a much friendlier stance towards crypto compared to the previous administration, which Kim viewed as conservative, with a strategy Kim described as an “active cultivation policy”.

While that may be the case, South Korea acknowledged that the FSC will need time to closely monitor the digital asset trading industry and observe what other countries choose to do when it comes to following America’s steps towards crypto adoption.

“We’ll have to see what the US does, but right now that’s a bit of a long shot. “The priority for now is how to connect this market to the existing financial system and establish a relationship with it,” he said.

He also stated that more money should flow into the stock market instead of the crypto market. Kim noted that there has been an increase in virtual asset trading volume recently, even outpacing South Korea’s local stock market indices KOSPI and KOSDAQ.

“Like [virtual asset] “It is necessary to closely monitor and focus on the unfair trade sector, as prices rise rapidly in a short time and the market is highly volatile,” said Kim.

South Korean regulators are making moves to secure the crypto market. Most recently, on November 20, the Democratic Party of Korea announced plans to introduce a 20% cryptocurrency taxation from January 2025.

The law will impose a 20% tax, with an extra 2% local tax, on profits from crypto trading that exceed 50 million Korean won or equal to $35,668.

Initially, regulators proposed that the 20% tax be applied to profits around 2.5 million won, or $1,800. However, some major crypto exchanges argued that imposing a 20% tax on the basic deduction of 2.5 million won would cause trading volumes to decline.