South Korean authorities are preparing for a significant transformation: spot Bitcoin and various crypto ETFs might enter the market by the latter half of 2025.
As per reports, the Financial Services Commission has delivered a roadmap to the Presidential Committee on State Affairs Planning detailing novel guidelines and infrastructure for creating, trading, and assessing these funds.
This initiative follows President Lee Jae-myung’s commitment to integrate crypto into the conventional financial framework.
South Korea Set to Introduce Spot Crypto ETFs
According to reports, the FSC intends to establish explicit regulations regarding custody, trading venues, and fund assessment prior to any ETF being launched. The objective aims for authorization in the second half of 2025, although officials caution that specifics may still evolve.
Retail investors are expected to access Bitcoin and other crypto assets through conventional brokerage accounts, rather than depending on self-custody methods.
Stablecoins Linked To The Won
In addition to ETFs, regulators plan to introduce a national stablecoin pegged to the Korean won by the end of 2025. According to the FSC roadmap, a won-based token would reduce capital outflow and offer a native digital payment solution.
This stablecoin framework will encompass issuance guidelines, reserve stipulations, and auditing norms to maintain high trust among users.
Investor Safeguards And Regulations
Investor protection is a key aspect of the proposals. The government intends to implement a “one-strike” policy for firms involved in market manipulation, necessitating executives to forfeit any unlawful profits. Public companies that violate these regulations could face accelerated delisting. There’s also discussions regarding tougher penalties for unfair trading practices and enhanced disclosure requirements for crypto enterprises.
Image: Verdict
Market Implications And Next Steps
South Korea already ranks among the leading retail crypto markets, with domestic investors holding roughly $76 billion in digital assets by the end of 2024. Establishing ETFs could channel some of that into regulated offerings, mitigating extreme fluctuations while attracting new capital from cautious investors.
The FSC is also contemplating extending Korea Exchange trading hours from 6.5 to 12 hours per day, which could enhance liquidity across all asset categories.
Despite the potential, analysts emphasize that finalizing the regulations accurately will be essential. Custody guidelines must protect against hacks, pricing methods need to represent real-time markets, and auditing standards have to affirm underlying asset holdings.
Nonetheless, this roadmap signifies a substantial shift in South Korea’s approach to crypto. If implemented as intended, the nation will align with the US, Canada, and parts of Europe in providing spot-based crypto ETFs—potentially establishing a precedent for other Asian markets.
Featured image from Unsplash, chart from TradingView
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