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Regulator in South Korea Moves Towards Approving Crypto ETFs Amid Policy Shift

South Korea's Financial Services Commission (FSC) is taking significant steps to potentially approve spot crypto exchange-traded funds (ETFs) by the second half of 2025.

This marks a notable change in the regulatory approach under the newly elected President Lee Jae-myung, who previously supported easing digital asset restrictions.

Previously, the FSC had prohibited the issuance of crypto ETFs due to concerns about financial stability and the volatility of cryptocurrencies.

The new roadmap includes regulatory frameworks for both spot crypto ETFs and won-based stablecoins aimed at reducing capital flight from South Korea’s economy.

In accordance with President Lee's campaign promises, the FSC plans to establish comprehensive infrastructure for safety and investor protection concerning crypto-related investments.

The roadmap outlines specific measures related to custody, operation, and evaluation of these funds, while still emphasizing that the proposals are not finalized.

Investors should be encouraged by the progressive political momentum, as the new administration aims to keep pace with global crypto trends following the successful launch of similar products in the U.S.

The FSC is also working on legislative efforts to create a legal framework for stablecoins, with comprehensive regulations on their listing and business rules.

This shift in policy could greatly enhance South Korea's position in the global cryptocurrency market, which already sees substantial retail investor participation.

As the FSC continues to develop these frameworks, market observers are keenly watching for how these initiatives will evolve and impact the broader financial landscape in South Korea.