South Korean regulators are gearing up for a big shift: spot Bitcoin and other crypto ETFs could hit the market by the second half of 2025.
According to reports, the Financial Services Commission has sent a roadmap to the Presidential Committee on State Affairs Planning outlining new rules and infrastructure for issuing, trading and valuing these funds.
This move follows President Lee Jae‑myung’s promise to bring crypto into the mainstream financial system.
South Korea Plans Spot Crypto ETFs
Based on reports, the FSC wants to set clear rules on custody, trading platforms and fund evaluation before any ETF hits the market. The plan targets approval in the latter half of 2025, though officials warn that details could still shift.
Retail investors will likely gain access to Bitcoin and other crypto assets through traditional brokerage accounts, rather than relying on self‑custody options.
Stablecoins Tied To The Won
Alongside ETFs, regulators aim to roll out a domestic stablecoin pegged to the Korean won by late 2025. According to the FSC roadmap, a won‑based token would cut down on capital flight and provide a homegrown digital payment option.
This stablecoin framework will cover issuance rules, reserve requirements and auditing standards to keep trust high among users.
Investor Protections And Rules
Investor safety features heavily in the proposals. The government plans a “one‑strike” policy for companies caught in market manipulation, requiring executives to return any illicit gains. Public firms that fall foul of these rules could face faster delisting. There’s also talk of stiffer penalties for unfair trading and stronger disclosure rules for crypto firms.
Market Impact And Next Steps
South Korea is already one of the world’s top retail crypto markets, with local investors holding about $76 billion in digital assets at the end of 2024. Opening ETFs could shift some of that into regulated products, smoothing out wild swings while bringing in new capital from cautious buyers.
The FSC is also looking at extending Korea Exchange trading hours from 6.5 to 12 hours a day, which could boost liquidity across all asset classes.
Despite the promise, experts say getting the final regulations right will be crucial. Custody rules must guard against hacks, pricing methods need to reflect real‑time markets, and audit standards have to verify underlying asset holdings.
Still, this roadmap represents a major shift in South Korea’s stance on crypto. If it goes ahead as planned, the country will join the US, Canada and parts of Europe in offering spot‑based crypto ETFs—potentially setting a trend for other Asian markets.
Featured image from Unsplash, chart from TradingView
