A significant regulatory process affecting the cryptocurrency market begins in South Korea. South Korea’s National Assembly will begin substantive legislative discussions regarding cryptocurrency spot ETFs in February.
Discussions will focus on proposed amendments to the Capital Markets Act that would create a legal framework for local financial institutions to issue and list spot crypto ETFs on exchanges.
The process also enjoys strong support from regulatory authorities. The Financial Services Commission (FSC) has announced its support for the legislative changes and will implement the necessary regulatory reviews alongside legislative work.
The South Korean government, in its “Economic Growth Strategy 2026” today announced a comprehensive roadmap for the institutionalization of digital assets. With this strategy, cryptocurrency policies, which have so far mainly been addressed within a regulatory framework, appear to be moving towards “recognition of institutional rights” and “promotion of the sector”.
The most notable aspect of the plan is the implementation of spot crypto ETFs, which the market has been waiting for for a long time. The government aims to introduce spot ETFs for major crypto assets, primarily Bitcoin. This step should accelerate the entry of institutional investors into the market by further facilitating transactions.
This development marks the first concrete action taken in South Korea almost two years after the US SEC approved Bitcoin spot ETFs. Market experts say the regulation could increase interest from institutional investors such as pension funds and large corporations.
Another critical topic on the country’s agenda is the regulation of stablecoins. The stablecoin regulatory system, at the heart of the planned two-stage legislative process for virtual assets, will be finalized in the first quarter of the year. Accordingly, stablecoin issuances will be carried out under a permission system and only companies with sufficient financial strength will be allowed to enter the market.
To avoid a repeat of previous collapses, issued stablecoins will need to be backed by more than 100% collateralized reserve assets. Additionally, users’ rights to request a refund will be legally protected. The government also plans to expand the use of blockchain-based commerce and international money transfers through regulations targeting cross-border transfers and stablecoin transactions.
*This does not constitute investment advice.
