South Korea is nearing a crucial decision on introducing Bitcoin ETFs, taking into account changes in the attitude towards digital assets in neighboring Japan.
Japan's Regulatory Climate and Its Influence
According to Maeil Business Newspaper (MK), the South Korean government is closely observing Japan's changing position on digital assets. Previously cautious about cryptocurrencies, Japan is now reconsidering its regulatory approach by discussing the possibility of classifying cryptocurrencies as financial products alongside securities. These discussions, which began on February 10, 2023, are expected to continue through mid-2025, with a legislative plan presented to Japan's National Assembly in 2026.
South Korean Financial Authorities' Comments
Kim So-young, vice chairman of South Korea's Financial Services Commission, commented on the possibility of introducing Bitcoin ETFs: "I have continued to say that I would carefully review (spot Bitcoin ETFs), and it is similar in the broader context. There are countries that have not yet introduced it. There are England and Japan."
Current Cryptocurrency Regulation Efforts in South Korea
Despite political shifts, South Korea's efforts to regulate cryptocurrencies persist. Over 30% of South Koreans invest in digital assets, and the country remains focused on compliance and enforcement. After the arrest of former president Yoon Suk Yeol on January 15, the government announced that charities and universities will be allowed to sell crypto donations starting in the second half of 2025. Additionally, enforcement actions have intensified, with leading cryptocurrency exchange Upbit receiving a suspension notice on January 16 for alleged KYC violations, prompting them to file a lawsuit against South Korea’s Financial Intelligence Unit.
South Korea is closely following international trends in cryptocurrency regulation and developing its approach to Bitcoin ETFs by observing other countries' experiences.
