Even though the United States approved a number of Bitcoin spot ETFs yesterday (11), South Korean financial regulators and the Bank of India are still not optimistic about this, saying that they will not follow the financial product decisions of other countries, and it is impossible to launch crypto asset ETFs, emphasizing that Cryptocurrencies will likely pose significant risks to emerging economies.
(A glance at the management fees of 11 Bitcoin spot ETFs, expected to raise US$4 billion in funds on the first day)
Korea Financial Supervisory Authority stands firm
As the U.S. Securities and Exchange Commission (SEC) approved the listing and trading of Bitcoin spot ETFs on various exchanges yesterday (11), various securities firms and trading institutions have successively listed the product. However, it seems that there are still voices of opposition or doubt.
According to South Korea's "Kyonghyang Shimbun" report, South Korea's policy on crypto assets seems unlikely to change as a result. It also interviewed relevant people from the South Korean Financial Commission (FSC) for their comments and views on the incident:
In order to maintain financial market stability and implement investor protection, the government has always adhered to the principle of prohibiting financial institutions from investing in cryptocurrency.
He added, “There are currently no plans to change the policy, and there has been no review of crypto-asset financial products.”
(South Korea passes the “Virtual Asset Protection Act!” The local exchange association implements a crypto asset alert system)
At the same time, the South Korean authorities also pointed out that the emergency measures related to crypto assets promulgated by the authorities in December 2017 have prohibited local financial institutions from investing in crypto assets by holding, purchasing or guaranteeing acquisition.
In addition, Article 4 of the country’s Capital Market Law only lists financial investment products, legal tender and general commodities, etc., that can be used as underlying assets of ETFs:
In other words, it is legally impossible to issue a cryptocurrency ETF.
South Korean Authorities: Gensler Reluctantly Passes Bitcoin Spot ETF
Interestingly, the Korean Financial Commission also quoted the statement of SEC Chairman Gary Gensler, claiming that Gensler approved the Bitcoin spot ETF due to pressure from all parties, emphasizing that the decision only applies to Bitcoin spot index products (ETP), It does not constitute approval or endorsement of crypto-assets:
If cryptocurrency investments are allowed, it could weaken the demand base of the domestic stock market.
(Admits approval of ETF due to failure of Grayscale lawsuit, Gary Gensler: By no means endorses Bitcoin)
Previously, South Korea’s Financial Supervisory Service (FSS) also stated that it would go to the United States this month to learn from the experience and discuss and develop the definition and determination of securities with the SEC.
Reserve Bank of India: Emerging markets cannot withstand crypto mania and potential bubbles
On the other hand, also taking an opposing stance is the Reserve Bank of India (RBI), whose governor Shaktikanta Das said at a financial sector seminar on Thursday that the stance of Indian regulators will remain unchanged and is concerned about the impact of cryptocurrencies. Risks to financial stability:
What is good for another market may not necessarily be good for us, so no matter who does what, our opposition to cryptocurrencies, along with the RBI, will remain the same, and we will not emulate the regulations of other countries.
He also used the "Tulip Mania" event in 1637 as a metaphor to emphasize that emerging markets may not be able to withstand "cryptocurrency mania and bubbles" that may lead to similar results.
In addition, he also reiterated his concerns that cryptocurrencies have no fundamental value, pointing out that for emerging market economies, taking this approach will bring huge risks, and these risks will be very difficult to control in the future.
From the stern warnings issued to many exchanges a few days ago, the Indian authorities' strict regulatory attitude towards the encryption industry can be seen.
(The warning was issued in December, and eight exchanges including Binance and Kraken have been removed from the Indian App Store)
This article Embrace Bitcoin? South Korea and India take a tough stance: It is legally impossible to launch a crypto-asset ETF. The post appeared first on Chain News ABMedia.
