Key Highlights
- South Korea plans to legalize Bitcoin spot ETFs this year to align with global market standards.
- The Financial Services Commission is fast-tracking the Digital Asset Act to introduce reserve and capital rules for stablecoins.
- The government aims to transition 25% of national treasury funds to blockchain-based deposit tokens by 2030.
South Korea’s Financial Services Commission (FSC) said on Monday it plans to allow Bitcoin spot exchange-traded funds (ETFs) and hasten the passage of the Digital Asset Act this year.
According to a report, the government aims to bring virtual assets into the official system to follow global market trends and create a regulated environment for investors.
This policy is part of the 2026 Economic Growth Strategy. It aims to clear up long-standing confusion about the status of digital assets as underlying securities while setting strict rules for stablecoins and cross-border transactions.
Regulating stablecoin frameworks
The main focus of the development of a second phase of legislation on digital assets. According to the FSC, the forthcoming bill will focus on a regulatory system for stablecoins.
The expected regulations include regulations on issuer authorization, including capital policies, strict asset management regulations with a provision to maintain at least 100% of the issued amount in reserve, and applicable redemption claims for users. Moreover, there would be joint regulations from the Ministry of Strategy and Finance and the FSC on cross-border stablecoin transfers and transactions to prevent illegal movement of funds.
Pivot on ETFs
The move toward permitting Bitcoin spot ETFs marks a shift from South Korea’s previous regulatory stance. Earlier, Bitcoin spot ETFs were banned because digital assets were not considered underlying assets in accordance with the Capital Markets Act.
However, given the active trading of these products in markets like the United States and Hong Kong, the government has decided to permit digital asset spot ETFs this year. This is geared towards promoting the local investment market by ensuring the prices related to cryptocurrencies can be monitored by investors without necessarily having to purchase them.
Legislative framework updates
The government is also developing an infrastructure for digital currency. One proposal calls to allocate a quarter of all national treasury funds to digital currency or “deposit tokens” by 2030.
This year, authorities plan to review the results of pilot projects and revise the Bank of Korea Act and the National Treasury Management Act. These updates are intended to create a legal framework for blockchain-based payments and settlements.
Electronic wallet integration
Furthermore, the plan includes distributing electronic wallets to help businesses make payments and settle transactions using these new deposit tokens. These changes suggest a future where the lines between traditional finance and digital assets become less clear in South Korea.
By accelerating the Digital Asset Act, the FSC is trying to give the legal clarity that institutional investors have sought for years. If the implementation of spot ETFs goes well, there could be an influx of institutional funds flowing into the domestic cryptocurrency market.
Also Read: South Korea Supreme Court Rules Bitcoin on Exchanges Can Be Seized
