South Korea’s Financial Services Commission (FSC) has submitted a roadmap to the Presidential Committee on Policy Planning, outlining a potential framework to approve spot crypto exchange-traded funds (ETFs), according to Yonhap News Agency.
Key Takeaways:
- South Korea’s financial regulator has submitted a roadmap to approve spot crypto ETFs.
- The plan reflects President Lee’s push to modernize digital asset regulation.
- The FSC’s shift marks a break from its previous stance that crypto ETFs posed financial risks.
The move signals a possible shift in regulatory posture under President Lee Jae Myung, who campaigned on easing restrictions around digital assets.
The roadmap proposes implementation measures for spot crypto ETFs in the second half of 2025 and marks a significant departure from the FSC’s long-standing position that such products pose financial stability risks.
South Korea’s FSC Previously Blocked Crypto ETFs Over Volatility Concerns
Until now, the FSC had barred crypto ETFs from being issued or traded in South Korea, citing concerns over volatility and the suitability of cryptocurrencies as base assets.
The change aligns with President Lee’s pledge to modernize South Korea’s financial landscape and offer more opportunities for younger investors to build wealth through regulated digital asset exposure.
The roadmap also reportedly includes plans to introduce regulatory frameworks for Korean won-based stablecoins by late 2025.
President Lee previously emphasized the importance of developing a domestic stablecoin market to reduce capital flight and retain liquidity within South Korea’s economy.
Following the media coverage, the FSC issued a statement clarifying that the reported proposals are not finalized.
The commission emphasized that the roadmap remains under review, and details may change as consultations continue.
Even before the latest filing, the FSC had been gradually opening the door to institutional crypto involvement.
Earlier this year, it began processing phased approvals for institutional investors to gain limited access to the digital asset market.
Beyond crypto, the FSC is also considering broader reforms, including a proposal to double trading hours at Korea Exchange, extending them from 6.5 to 12 hours daily.
South Korea is home to one of the most active retail crypto markets globally. By the end of 2024, local investors held approximately 104 trillion won (about $75.7 billion) in digital assets, according to FSC data.
South Korea’s Ruling Party Proposes Stablecoin Bill
South Korea’s Democratic Party has introduced a bill to legalize stablecoin issuance by domestic firms, marking the first major crypto policy under newly elected President Lee Jae-myung.
The proposal sparked a sharp rally in crypto-related stocks, with KakaoPay jumping 18% as investors welcomed the government’s apparent commitment to digital asset innovation.
The bill, part of the broader Digital Asset Basic Act, would allow stablecoins backed by reserves and issued by firms with a minimum capital of 500 million won.
It also calls for the creation of a Presidential Digital Asset Committee and mandates regulatory oversight by the Financial Services Commission through an approval and reporting process.
Despite growing political momentum, the initiative faces resistance from the Bank of Korea.
Governor Rhee Chang-yong has warned that stablecoins issued by non-bank entities could interfere with monetary policy and argues that the central bank should control any development of a won-based digital currency.
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