The Financial Services Commission (FSC) of South Korea has presented a roadmap to the Presidential Committee on Policy Planning, seeking to establish a framework for the approval of spot crypto exchange-traded funds (ETFs), as reported by Yonhap News Agency.
Highlights of the proposed roadmap include:
- A new initiative from South Korea’s financial regulator aimed at the approval of spot crypto ETFs.
- A reflection of President Lee Jae Myung’s ambition to update regulations surrounding digital assets.
- A notable change from the FSC’s earlier perspective that crypto ETFs posed risks to financial stability.
This development indicates a potential shift in regulatory attitudes under President Lee, whose campaign focused on reducing restrictions surrounding digital assets.
The roadmap outlines plans for the implementation of spot crypto ETFs in the latter half of 2025, signifying a decisive break from the FSC’s previously held view that these financial products could threaten economic stability.
Previous Restrictions on Crypto ETFs
Historically, the FSC had prohibited the issuance and trading of crypto ETFs, largely due to volatility concerns and questions about the viability of cryptocurrencies as suitable base assets.
This policy change is in line with President Lee’s commitment to modernize the financial sector in South Korea and to enhance wealth-building opportunities for younger investors through regulated engagement with digital assets.
Furthermore, the roadmap reportedly includes plans to establish regulatory frameworks for South Korean won-based stablecoins by late 2025, responding to President Lee’s earlier advocacy for developing a domestic stablecoin market to mitigate capital flight and bolster liquidity in the nation’s economy.
In light of recent media coverage, the FSC has stated that these proposals are not yet finalized.
MASSIVE BREAKING: South Korean presidential election won by Lee Jae-myung who committed to allow South Korea’s $884 billion national pension fund to invest in Bitcoin and cryptocurrency — also promises to launch Bitcoin ETF.
Wild this happened the 2nd day I am in South Korea. pic.twitter.com/NkXfe0AaIy
— Dennis Porter (@Dennis_Porter_) June 3, 2025
The commission has reiterated that the roadmap is still under review and is subject to change based on ongoing consultations.
Prior to this latest announcement, the FSC had already begun to facilitate institutional involvement in the crypto market by processing phased approvals for limited access for institutional investors earlier in the year.
Beyond its focus on cryptocurrencies, the FSC is also considering sweeping reforms, including a proposal to extend trading hours at the Korea Exchange from 6.5 to a full 12 hours each day.
Recognized as one of the world’s most active retail crypto markets, by the end of 2024, South Korean investors are estimated to hold around 104 trillion won (approximately $75.7 billion) in digital assets, according to FSC data.
Proposed Legislation for Stablecoin Issuance
This legislative proposal has triggered an uptick in crypto-related stocks, with KakaoPay seeing an 18% surge as the market reacted positively to the government’s evident dedication to fostering digital asset innovation.
The proposal, part of the broader Digital Asset Basic Act, intends to permit the issuance of stablecoins backed by reserves from firms that maintain a minimum capital of 500 million won. It also advocates for the establishment of a Presidential Digital Asset Committee, with the FSC overseeing regulatory approval and reporting processes.
Despite this political momentum, the initiative has encountered opposition from the Bank of Korea, where Governor Rhee Chang-yong has expressed concerns that stablecoins issued by non-bank entities could disrupt monetary policy. He argues that the central bank should oversee any development of a won-based digital currency.
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