Nikolas Sargeant
South Korea's ruling party leader announced Friday that his party would consider approving cryptocurrency-based exchange-traded funds (ETFs) following appropriate regulatory revisions, signaling a potential shift in the nation's approach to digital asset investment vehicles.
Kweon Seong-dong, floor leader of the People Power Party (PPP), made these remarks during a high-level meeting with government officials and executives from local cryptocurrency exchanges at the National Assembly in Seoul on March 7.
Korean Government Evaluating Global Crypto ETF Developments
According to local media reports, Seong-dong emphasized the necessity for "system improvements" to foster development in the cryptocurrency assets market. He indicated that authorities would carefully evaluate these investment products and their international adoption trends before implementing similar frameworks domestically.
"The government and the PPP will review global trends before considering the approval of spot crypto ETFs, taking infrastructure and regulatory framework into account," Seong-dong told reporters following the meeting.
The floor leader further stressed that creating policies balancing "both user protection and market development" has become inevitable given the dramatic surge in cryptocurrency trading volume across Korean exchanges.
Data from Bloomberg reveals that from November 5-28 last year, daily average trading on Korean cryptocurrency platforms reached approximately $9.4 billion—significantly exceeding the Korea Composite Stock Price Index (KOSPI) trading volume of $7 billion during the same period.
A recent report indicated that South Korean regulators are closely monitoring Japan's regulatory approach as they consider granting approvals for Bitcoin ETFs in their own financial markets.
Financial Services Commission's Ongoing Assessment of ETF Approvals
The country's Financial Services Commission (FSC) has been engaged in discussions regarding Bitcoin ETF approval since late 2023. While actively considering these products, the regulator has maintained a cautious stance toward cryptocurrencies generally and Bitcoin ETFs specifically.
Korea Financial Investment Association Chairman Seo Yoo-seok recently highlighted the importance of embracing cryptocurrency ETFs to maintain competitive positioning in global markets.
"While the virtual asset market is projected to continue its expansion, Korea should not be left out," Seo noted in public comments.
Several South Korean financial leaders have criticized the FSC for allowing competing nations to take the lead in cryptocurrency ETF innovation. Jung Eun-bo, chairman of the Korea Exchange (KRX), warned last month that the country risks falling behind if it further delays cryptocurrency ETF adoption.
"Cryptocurrency represents a sector capable of generating new value in the financial industry," Jung stated emphatically. "We must not delay the introduction of cryptocurrency ETF trading."
The potential approval of spot cryptocurrency ETFs would represent a significant development in South Korea's approach to digital asset regulation, potentially opening new investment channels in one of Asia's most active cryptocurrency markets.
