The South Korean National Pension Service (NPS) recently clarified that it does not have any plans to invest in cryptoassets despite recent purchases of Coinbase and MicroStrategy stocks. The fund stated that these purchases were made automatically through index management tools that track benchmark indices like the Morgan Stanley Capital International Index (MSCI). The NPS uses consignment management providers for individual corporate investments, which led to the buys of Coinbase and MicroStrategy shares when they were included in relevant benchmark indices.
Last year, NPS fund managers bought $20 million worth of Coinbase shares, followed by a $33.75 million investment in MicroStrategy shares in August of this year. However, the fund emphasized that cryptoassets such as Bitcoin are not investment targets for them, in response to a request for comment from lawmaker Baek Jong-heon. Baek asked the NPS to report on the scale and proportion of its indirect investment in cryptoassets through its recent stock purchases in crypto-related companies like Coinbase and MicroStrategy.
The NPS clarified that it has never purchased shares of these companies with the intention of investing in cryptoassets. While the fund did not completely distance itself from the crypto market, it stated that its fund executives did not intervene in the automatic purchase of COIN or MXN shares. The Fund Management Committee would have to make a ruling if they wanted to restrict investment in a specific industry or company group, including those related to cryptoassets. The NPS also mentioned that they would actively support the committee if they decided to restrict investments in crypto-related companies.
Lawmaker Baek issued caution to the NPS and its committee, urging them to closely review investment policies related to cryptoassets and consider the risks and volatility of the crypto market. He emphasized the importance of managing potential risks that may arise in the future. While South Korean firms are currently not allowed to make direct investments in cryptoassets, there is a growing push to lift restrictions as American and Japanese firms are utilizing their balance sheets to invest in cryptocurrencies. A South Korean IT business owner expressed the desire for more freedom to invest in assets like BTC and ETH, highlighting the discrepancy between investment regulations in different countries.
The NPS’s clarification on not planning to invest in cryptoassets comes despite recent purchases of Coinbase and MicroStrategy shares, which were made automatically through index management tools. The fund’s statement was in response to a request for comment from a lawmaker regarding its indirect investment in cryptoassets through these acquisitions. While the NPS made it clear that Bitcoin and other cryptoassets are not investment targets for them, there is a possibility that the Fund Management Committee may make further investments in crypto-related companies in the future. Lawmaker Baek advised the NPS to carefully consider investment policies related to cryptoassets to manage risks and volatility effectively.
