Crypto

South Korea Set to Dive into Crypto ETFs by 2025: Demand Sparks Change!


In a significant announcement that could reshape the landscape of investment in South Korea, Jeong Eun-bo, chairman of the South Korea Stock Exchange, unveiled plans to “explore” the much-anticipated approval of crypto-based exchange-traded funds (ETFs). This strategic move is a vital part of the exchange’s bold “value-up program,” aimed at tackling the current market hurdles head-on.

Korea Exchange Sets Its Sights on Crypto ETFs

On January 2, Jeong Eun-bo dropped the bombshell at the 2025 Securities and Derivatives Market open ceremony, revealing that the Korea Exchange is poised to delve into crypto-based ETFs this year. He pointed out that the South Korean capital markets are grappling with significant challenges in 2024, stunting the growth potential of local companies.

Jeong elaborated that the combined effects of global conflicts and domestic political strife have rendered the market “significantly sluggish compared to major countries.” With 2025 on the horizon, the South Korean market faces looming risks as “the domestic and global economic conditions remain unfavorable.”

Courageously, the Chairman assured that the exchange is committed to its value-up program, aiming to “engage more leading companies and foster a management culture focused on shareholder value.”

He also hinted at an exciting future, stating that the Korea Exchange will “benchmark overseas cases for new business avenues, like crypto ETFs, and explore uncharted territories in the capital market.”

It’s crucial to note that crypto ETFs have been banned in South Korea since 2017. The Financial Services Commission (FSC) reaffirmed its tough stance even after the US Securities and Exchange Commission (SEC) greenlit crypto-based investment products last year.

However, in a surprising twist, the financial watchdog announced in October that a newly formed advisory group will review the ban on crypto ETFs, signaling a potential thaw in the previously rigid regulatory environment. This change appears to be inspired by the impressive performance of spot Bitcoin and Ethereum ETFs, which exceeded many experts’ expectations during their inaugural year.

Political Turmoil Stalls Crypto Regulations

In earlier statements, the Korea Exchange’s chief had advocated for the institutionalization of crypto in South Korea to “create added value.” Jeong urged lawmakers and financial institutions to rethink their approach to digital assets, emphasizing that the sector has rapidly evolved and gained substantial influence.

He stressed that for South Korea to remain competitive on the global stage, integrating digital assets into institutional finance is paramount. Yet, the current regulatory environment has hindered the market’s ability to cross essential regulatory thresholds, stifling its growth and competitiveness. Unfortunately, any progress on crypto-related regulations will remain on hold until the ongoing political crisis is resolved, which may take several months.

Last December, President Yoon Suk Yeol declared the first emergency martial law in four decades, accusing the opposition Democratic Party of anti-state activities. The National Assembly swiftly voted to nullify this declaration just six hours later, leading to Yoon’s impeachment along with Prime Minister Han Duck-soo, who briefly served as acting president.

Recent reports from the Associated Press indicate a dramatic standoff between South Korea’s presidential security service and law enforcement, as authorities attempted to detain the impeached President Yoon at his residence.

The Constitutional Court is now tasked with determining whether to uphold Yoon’s impeachment or reinstate him, a decision requiring a favorable vote from at least six of the nine justices.

crypto, TOTAL

Total crypto market capitalization stands at an impressive $3.41 trillion, according to the latest one-week chart. Source: TOTAL on TradingView

Image credit: Unsplash.com, Chart: TradingView.com


Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button