South Korea is taking a step towards integrating cryptocurrency exchange-traded funds (ETFs) into its financial system by unveiling a roadmap for their approval.
Crypto ETF Roadmap Details
The Financial Services Commission (FSC) of South Korea has outlined concrete steps and a timeline for the approval process of cryptocurrency ETFs. In the second half of this year, the commission intends to draft the necessary operational regulations to enable these funds to enter the market and be actively traded. This proactive move symbolizes a significant regulatory shift in the country's perspective on the burgeoning digital asset class.
Background of Cryptocurrency Policy in South Korea
The approval of cryptocurrency ETFs and stablecoins pegged to the won is part of a broader campaign by President Lee Jae Myung to empower the financial foundations of the younger population. Despite previous bans on these products due to financial stability concerns, the president emphasizes the necessity of their legalization. The FSC had earlier prohibited their use, citing risks associated with cryptocurrencies as underlying assets.
Future of Financial Regulation in the Country
In addition to cryptocurrencies, the FSC is considering a potential increase in trading hours—from 6.5 hours to 12 hours—of the Korea Exchange (KRX), reflecting a forward-thinking approach to managing the financial market landscape. South Korea is home to one of the largest cryptocurrency markets, with citizens holding around 104 trillion won ($75.7 billion) in cryptocurrency by the end of last year, underscoring the country’s integral role in the global crypto ecosystem.
The FSC's plan for the implementation of cryptocurrency ETFs and changes to market regulation signal South Korea's readiness to adapt to the rapidly evolving world of digital assets.
