[Manbo Jeongdam] Ministry of Economy and Finance, Blockchain, Honam... Talking about Kim Yong-beom

Experience in Senior Political Positions at FSC and MoEF
Economy Bureaucrat Valued by Kim Jin-pyo and Kim Seok-dong
At the Forefront of Economic Crises Including IMF, Financial Crisis, and COVID-19
Opposed Closure of Virtual Asset Exchanges... Introduced Real-Name Transactions
Transformed into CEO of Blockchain 'Hashed Open Research'

Manbo Jeongdam - Kim Yongbeom, Former Vice Minister of Strategy and Finance. Photo by Jo Yongjun jun21@

#MinistryOfStrategyAndFinance #Coin #Poverty #Elite #Honam

These are all descriptors for Kim Yong-beom, CEO of Hashed Open Research. Once a public official, he is now active in the blockchain industry. Every time I see CEO Kim, I think he is a person difficult to define with a single word. An economic bureaucrat who likes paintings by Kim Hwan-ki and Kim Jong-hak, and enjoys listening to Hwang Byung-ki’s Gayageum Sanjo?can such a person truly understand the lives of ordinary people? The expectation was pleasantly overturned. When asked a question reflecting such a perspective, he replied with clear eyes, "My hometown is a rural area in Muan-gun, Jeollanam-do. I know poverty very well." The many descriptors such as orthodox bureaucrat and independent economist are too narrow to represent him. It is more accurate to describe him as a person standing on the boundary. Asia Economy walked with him and crossed boundaries discussing topics from the Korean economy, blockchain, polarization, to personal stories.

Secret walking spot Suseongdong Valley... Experienced May 18th as a high school senior, "I have a sense of debt"

, Gyeomjae Jeong Seon, Ink and light color on paper, 33.7*29.5cm, Collection of Kansong Art Museum.

The interview location, Suseongdong Valley, holds special meaning for him. When working at the Financial Services Commission, whenever his mind was troubled, he would take a solitary walk in Suseongdong Valley during lunch breaks. Walking up the trail, you can see the Government Complex Seoul. CEO Kim said, "When you look from here, the government building looks small, right? When I was inside, the work felt heavy and large, but from a third-party perspective, I could see it differently," he began.

When I marveled that such a place existed in Seoul, he looked back and smiled, "It’s my secret place." The ink wash painting 'Suseongdong' by Gyeomjae Jeong Seon unfolds before the eyes. Suseongdong Valley was a favorite spot for literati including Prince Anpyeong during the Joseon Dynasty. Over time, the site of the Three Military Offices (Ministry of Rites) became the Government Complex Seoul, and behind Gyeongbokgung Palace where the king stayed, the Blue House was established.

Although now called 'CEO,' many still refer to him as 'Vice Minister.' This is because he has served as the 1st Vice Minister of the Ministry of Strategy and Finance and as Vice Chairman of the Financial Services Commission. Aside from CEO Kim, only a few bureaucrats have held political positions in both the Ministry of Strategy and Finance and the Financial Services Commission, including Kim Seok-dong, head of Jipyung Humanities and Social Research Institute, Chu Kyung-ho, a People Power Party lawmaker, and Shin Je-yoon, former chairman of the Financial Services Commission.

Manbo Jeongdam - Kim Yongbeom, Former Vice Minister of Strategy and Finance. Photo by Jo Yongjun jun21@

The descriptor that always follows him is 'Honam.' His hometown is Haeje-myeon, Muan-gun, a region barely clinging to the mainland among the islands of the southern provinces. In today’s political landscape that pursues political clarity, the word 'Honam' carries complex implications. It is both what confines bureaucrat Kim Yong-beom and what expands his domain. CEO Kim was a high school senior taking exams in Gwangju on May 18, 1980.

- Your university friends were probably involved in student activism, but you studied for civil service exams. What were your thoughts then?

"I came up to Gwangju in high school. I experienced May 18th as a senior. I studied at university as well. I have a sense of debt from that time. After commissioning, I thought I should play the role I can."

He graduated from Seoul National University’s Department of Economics and passed the 30th Administrative Examination in 1986 to be commissioned. Eleven years later, as a director at the Ministry of Finance and Economy, he experienced the IMF crisis. "The atmosphere at the Ministry of Finance and Economy was grim at that time," he recalled. Since then, he has experienced all economic crises including the global financial crisis, credit card scandal, European economic crisis, and COVID-19. Perhaps because of this background, CEO Kim is one of the few economic bureaucrats who emphasize the government’s fiscal role.

Junior recognized by Kim Jin-pyo and Kim Seok-dong... From orthodox bureaucrat to blockchain industry

Photo by Hyunmin Kim kimhyun81@

After commissioning, CEO Kim served as director of financial policy at the Ministry of Finance and Economy, senior economist at the World Bank, head of the banking system division at the Ministry of Finance and Economy, director of financial policy bureau at the Financial Services Commission, vice chairman of the Financial Services Commission, and 1st Vice Minister of the Ministry of Strategy and Finance. He was known as a Korean bureaucrat fluent in advanced English during his World Bank dispatch. Breaking precedent, the World Bank created a new position allowing him to work until retirement. At that time, Deputy Minister Kim Seok-dong personally called him saying, "I will appoint you as bank division head, so come in." This anecdote is well known. He now serves as CEO of Hashed Open Research, a leading group in the blockchain industry under Hashed.

In 2017, while serving as vice chairman of the Financial Services Commission, CEO Kim announced the 'Virtual Asset Transaction Transparency' policy allowing coin trading only through real-name accounts. This was during the bubble period when Bitcoin’s highest price surged to $19,600. Originally, the Ministry of Justice, which led the inter-agency task force, advocated closing virtual asset exchanges. However, the Financial Services Commission proposed maintaining virtual asset trading but managing it through real-name verification accounts, changing the direction. Considering this context, the move of an orthodox bureaucrat into the blockchain industry is a noteworthy action.

Walking course of Manbojeongdam with CEO Kim Yongbeom and Asia Economy.

- Why did you move to the blockchain industry? It’s an unexpected move.

"When I was at the Financial Services Commission, the coin bubble was severe. At that time, there was little information or knowledge about coins. I felt the fear of putting out a fire in an unfamiliar place. Everyone saw that when finance and blockchain met, it could spread into a bubble. I think the bubble shock can come again and again. When I went to the Ministry of Strategy and Finance, I was busy fighting the pandemic and had no time to focus on blockchain, but I thought the world would change after blockchain."

CEO Kim evaluated blockchain as a 'transformative technology.' This means a technology that can fundamentally change the current order system. He sees blockchain and artificial intelligence (AI) as fitting this category. Bitcoin is a representative example.

He emphasized that "With the emergence of applied technologies like the Lightning Network speeding up Bitcoin circulation and ownership inscription functions like Ordinals being added, Bitcoin’s likelihood of being used as a payment method in digital music, real estate, bonds, and deposit transactions has increased," highlighting Bitcoin’s practical use.

He added, "Initially, Bitcoin appeared as an electronic payment method, but now it is rather gaining attention as a new store of value, 'digital gold,' more than as a payment function." He said, "Buying and holding representative coins like Bitcoin or Ethereum, whose technical utility has been verified and established as investment assets, is safe."

Recently, Bitcoin prices have been unstoppable. Buying has been concentrated, and investment enthusiasm is high. However, CEO Kim strongly warned against reckless chasing purchases. He explained again, "You should invest long-term with the mindset of participating in new technology rather than seeking short-term profits." Hashed, the group he belongs to, is famous as a long-term blockchain investment company.

CEO Kim emphasized the need to pay attention to Japan’s approach regarding blockchain. Conservative Japanese authorities are actively easing blockchain regulations. This is interpreted as Japan seeking a new breakthrough for its economy, which is lagging in global competitiveness in manufacturing and IT industries, through fostering the blockchain industry.

As part of this, Prime Minister Fumio Kishida attended events such as IVS Crypto Kyoto and WebX Japan. It was notable as it is rare for the highest government official of an advanced country to personally attend blockchain events. CEO Kim evaluated, "Japan has completely changed, with the government top-down approach for nurturing the Web 3.0 industry, the prime minister attending personally, and government officials coming to industry networking parties." This moment revealed his perspective on the importance of the Korean government’s role.

"High interest rate shock begins in earnest this year"... Korea positioning as a country aligned with China

Manbo Jeongdam - Kim Yongbeom, Former Vice Minister of Strategy and Finance. Photo by Jo Yongjun jun21@

After moving to Hashed Open Research, he is writing his name again as an independent economist. When asked about the current state of the Korean economy, he answered, "2024 to 2025 will be the period when the high interest rate shock begins in earnest."

From 2020 to 2021, the world fought the pandemic, and governments worldwide implemented fiscal expansion policies. 2022 to 2023 can be summarized as the 'war against inflation (high interest rates).' The U.S. sharply raised interest rates. There were issues like the British pound crash and Silicon Valley Bank (SVB) bankruptcy, but according to CEO Kim, these were overcome well. He continued gravely.

"The shock comes about 12 to 18 months after interest rate hikes. Since rate hikes began in 2022, the effects such as bankruptcies due to high interest rates will come from this year. Financial institutions like banks, securities firms, and savings banks have reduced profits and increased provisions. Asset prices rose, but why? Before 2022, it was easy money. The characteristics were low interest rates, low inflation, low wages, abundant liquidity, and rising asset prices. Now, the system is different with high interest rates, high inflation, and high wages. Even refinancing is at least 6 to 7%. Now, over-leveraged entities are suffering."

However, he drew a line, saying, "There is no possibility of it turning into a systemic crisis." This is because the government closely manages high-risk areas. But he emphasized the need for special attention to macroeconomic stability. CEO Kim said, "Japan is classified as a country aligned with the U.S., and Korea is evaluated as a country aligned with China. From that perspective, it is important to communicate externally that Korea has the capacity for independent macroeconomic stability."

He pointed to China as the country currently in the most difficult situation economically. CEO Kim said, "China’s economic characteristic is over-leverage," adding, "China is one of the countries most severely hit after the pandemic." He explained that China’s economy is highly dependent on real estate and that there are policy missteps related to the Evergrande crisis. He added, "Amid U.S. containment, aging is also accelerating. The era of 6 to 7% growth is over, and a long-term low growth trend of around 3 to 4% will continue."

"Polarization problem worsens... Urgent reform of the National Pension"

"The gap between rich and poor is the oldest and most fatal disease."

- Plutarch

CEO Kim’s recent interest is 'polarization.' In his book "Upheaval and Balance," he devoted a chapter to 'resolving polarization.' He emphasized that to solve economic inequality, it is necessary to address △ retirement of industrial workforce △ blind spots in employment safety nets △ asset gaps.

"Most people working in global competitive fields like semiconductors and batteries are regular employees at large companies. There is a big gap with workers at small and medium enterprises. Conversely, Korea’s luxury goods market ranks 3rd or 4th globally. I don’t think the country’s structure itself is broken. But I want to say that the contrast between classes, generations, and regions is large. The country is small, but the gap inside is big, so social conflicts are also big. Now the ladder is fixed. Certain classes accumulate too much wealth, while others are pushed out of Seoul."

Along with polarization, CEO Kim cited 'National Pension reform' as an urgent issue. He continued with a serious expression.

"The National Pension is a public pension system operated by the government, so community consensus is important. As the population decreases, the burden on future generations increases, causing conflicts over the National Pension system. Public pensions are fundamentally a product of social integration (consensus). Serious debate is needed on this."

He evaluates that not only the National Pension but also conflicts between medical and political sectors have underlying issues related to the National Health Insurance. He repeatedly emphasized that large discourses requiring community consensus should be fiercely debated at the level of national governance involving the government, civic groups, and academia. When asked at the end if he misses public office, CEO Kim waved his hand saying, "I have done enough."

Interview by Lee Seon-ae, Head of Securities Capital Markets Department

Compiled by Hwang Yoon-joo, Reporter