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South Korea’s Crypto Push: Bitcoin ETFs Headed For Approval In 2025
- South Korean regulators are preparing to introduce spot Bitcoin and other crypto ETFs by the second half of 2025.
- The Financial Services Commission has outlined new rules and infrastructure for issuing, trading, and valuing these funds in a roadmap to the Presidential Committee on State Affairs Planning.
- President Lee Jae-myung aims to mainstream crypto in the financial system.
- The FSC plans to set rules on custody, trading platforms, and fund evaluation before approval of ETFs in the latter half of 2025.
- Retail investors may access Bitcoin and crypto assets through traditional brokerage accounts instead of self-custody options.
- Regulators also plan to introduce a domestic stablecoin tied to the Korean won by late 2025 to reduce capital flight and enable digital payments.
- The stablecoin framework will include issuance rules, reserve requirements, and auditing standards to maintain user trust.
- Proposals focus on investor protections, with plans for strict penalties for market manipulation and stronger disclosure rules for crypto firms.
- South Korea holds a significant retail crypto market share, and the introduction of ETFs could channel funds into regulated products and boost liquidity.
- The FSC considers extending Korea Exchange trading hours to enhance liquidity across asset classes.
- Getting the regulations right on custody, pricing, and audit standards is crucial before the introduction of ETFs.
- The potential introduction of spot-based crypto ETFs would align South Korea with the US, Canada, and parts of Europe, possibly influencing other Asian markets.
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