A big money group in South Korea called the Korea Institute of Finance has written a report that says it could be risky if the government allows trading special funds linked to Bitcoin or Ethereum. The person who wrote the report, Lee Bo-mi, worries about this.
Prominent South Korean Financial Research Institute Warns Against Bitcoin ETFs: More Risks Than Rewards?
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- South Korea’s Korea Institute of Finance warns against approving Bitcoin or Ethereum spot ETFs due to potential risks.
- Researcher Lee Bo-mi thinks that allowing these special funds could upset the money market and lead to poor resource use.
- Despite the concerns, some urge Seoul to follow Washington and Hong Kong’s lead in approving crypto spot ETFs.
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Lee says that if the government allows people to trade special funds linked to Bitcoin or Ethereum, their prices could increase significantly. This could cause much money to flow into the digital coin market, which could be a problem. Also, if the prices of these digital coins drop, it could make things difficult for the money market and businesses.
Lee thinks we must study the good and bad sides before allowing these special funds. Some people in the government have said they will look into this, but the ones who make the rules are being careful.
Even though there are worries, some people who like digital money and finance are encouraging South Korea to do what Washington and Hong Kong have done by allowing these special funds.
Lee also says that the bad things about allowing these special funds could be more than the good things. She says people don’t understand enough about the value of digital coins, which can change in price very quickly. If we allow products using these coins in South Korea, people might be tricked into thinking that digital coins are safe and tested.
Lee warns that the dangers could become much bigger, and the rulemakers should be ready before they allow these special funds. She also mentions that the steps to keep investors safe might not work as well as we hope.
Right now, South Korea lets certain brokers deal with Bitcoin futures funds but does not allow other types of Bitcoin-linked funds.
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