South Korea's Financial Services Commission (FSC) is evaluating the possibility of lifting the ban on domestic spot cryptocurrency ETFs and institutional accounts on crypto exchanges.
New Position of the Financial Services Commission
The newly established cryptocurrency advisory committee within the FSC is reviewing current restrictions on spot ETFs. This move could indicate a significant shift in the commission's approach to digital assets in traditional financial markets.
Political and Economic Factors
Increasing political pressure may have influenced the reassessment of the ban. Both the ruling Democratic Party and opposition parties are advocating for the approval of local spot Bitcoin ETFs during their election campaigns. In May, the newly elected left party requested the FSC to reevaluate the ban.
Historical Context and Regulation
Since 2018, institutional investors in South Korea have been effectively barred from opening cryptocurrency trading accounts on exchanges due to strict regulations by the FSC. The ban was initially justified as a necessary measure to protect financial markets from potential volatility caused by cryptocurrency assets.
The reassessment of the ban on spot crypto ETFs in South Korea could be an important step towards integrating digital assets into the country's traditional financial systems.