According to several local reports, South Korea is reviewing its ban on spot cryptocurrency ETFs and is also preparing to officially launch a Virtual Asset Committee that will be tasked with advising on new crypto policies.
South Korea is at a crossroads regarding cryptocurrency regulation, as the country is reviewing its ban on crypto spot ETFs, which prevents investors from accessing these financial instruments. This review comes amid rising interest in digital assets, both domestically and internationally.
Due to this growing interest, the Financial Services Commission (FSC), the body that directs the country’s financial policies, is forming a new Committee focused on cryptocurrencies and virtual assets, which will be in charge of evaluating policies related to this asset class. The creation of this new committee is marking a significant change in the regulation of the sector.
Cryptocurrency ETF ban under review
Since 2018, South Korea has maintained a restrictive stance towards cryptocurrency-based investment products, limiting the participation of institutional investors in this market. However, the recent creation of the Virtual Assets Committee has opened the door to the possibility of lifting this ban. This committee, which It will be officially presented as early as this month, according to local media News1, will be made up of experts in the financial and regulatory fields with the aim of Discuss policies related to digital assets and Evaluate the feasibility of allowing local investors to participate in cryptocurrency spot ETFs.
The FSC has noted that the committee, in addition to reviewing the ban on spot ETFs, is also reviewing institutional accounts on cryptocurrency exchanges, indicating a shift in perception of digital assets in the country.
So far, U.S.-listed Bitcoin and Ethereum spot exchange-traded funds are blocked for institutional investors in South Korea. These investors are also not allowed to open accounts on exchanges to manage crypto assets. While these bans were put in place to protect investors from the potential risks of crypto assets, the reality is that they have been pushing them to trade in unregulated markets, such as OTC markets. The FSC said it is reviewing its policies to assess these bans.
South Korea creates Virtual Assets Committee
The Virtual Assets Committee, which is set to be officially launched this month, aims to address concerns and challenges facing the cryptocurrency sector in South Korea. This policy advisory body, established under the Virtual Asset User Protection Act, seeks to balance regulation and market growth. The committee’s chair will be Kim So-young, who is also vice chair of the FSC.
This new committee will focus on reviewing existing legislation and exploring new regulations that would allow corporate investment in digital assets. The creation of this committee is an important step towards modernizing South Korea’s regulatory framework, which has been criticized for its rigidity compared to other international markets. The FSC has acknowledged the need to update its policies to facilitate a more favorable environment for cryptocurrency investments.
Additionally, the committee will also address the monopolistic structure of digital asset exchanges in South Korea, where Upbit dominates the market. This review is crucial to ensure competition and transparency in the sector, which could foster more sustainable growth of cryptocurrencies in the country.
Thailand is also considering opening its market to crypto assets
As South Korea reconsiders its policies, the Thai market is also preparing to open up to crypto assets. Thailand’s Securities and Exchange Commission (SEC) has proposed new regulations that would allow mutual and private funds to invest in digital assets, aligning with international trends. This proposal seeks to facilitate the diversification of investment portfolios and attract institutional investors interested in the cryptocurrency market.
Thailand’s SEC has noted that while investors can already access cryptocurrency ETFs overseas, the domestic regulatory framework needs to be updated to reflect changes in the global market. The proposed new regulations include limits on funds’ exposure to digital assets, as well as guidelines for managing risks associated with these investments.
The opening of the Thai market represents an opportunity for investors to diversify their portfolios and access crypto-related products under expert management. This trend in Thailand may influence the direction South Korea takes in its review of policies on spot crypto ETFs and digital asset regulation.
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