- South Korea backs local crypto ETFs and eases restrictions on won-based stablecoins.
- The Financial Services Commission plans to approve crypto ETFs by the second half of 2025.
- FSC clarifies that the crypto roadmap is under review and requires further consultation.
South Korea is making a significant change in its financial policies by supporting local spot crypto exchange-traded funds (ETFs). The country is also relaxing the rules towards Korean won-based stablecoins. This represents a shift in the country’s position and follows a campaign promise by President Lee Jae-Myung to support cryptocurrency.
The Financial Services Commission (FSC) has presented its roadmap to the Presidential Committee on Policy Planning. The roadmap indicates that the approval of spot crypto ETFs is expected to occur in the second half of 2025. The FSC had previously forbidden these products due to concerns about financial stability and the volatility of crypto assets.
South Korea’s Crypto Policy Shift
The proposed roadmap also entails the plans to remove restrictions on the won-backed stablecoins. President Lee supported the introduction of such stablecoins to curtail domestic capital outflow. The government aims to create a secure environment for digital assets, enabling the use of innovative financial products on the local market.
Such a policy change is consistent with the overall policy direction aimed at assisting young people in South Korea in establishing financial security under President Lee. The country has adopted crypto ETFs and stablecoins to provide its institutional investors with access to new investment opportunities. With the government prioritizing the modernization of the financial industry, the local economy is expected to receive increased investments.
FSC Reviews Crypto Plan and Market Expansion
Nevertheless, the FSC clarified on Friday that the roadmap suggested remains under review. The plan has not been fully developed yet, and further consultation is scheduled to be discussed before implementation.
Related: South Korea Moves Stablecoin Adoption: Ruling Party Unveils Plan
Another step being taken by the FSC is the liberalization of the financial market, which would enable institutional investors to trade in crypto assets as well. Moreover, the government is planning to increase the working hours of the Korea Exchange. The exchange, which currently operates for 6.5 hours a day, is considering extending its trading hours to 12.
South Korea is one of the largest retail markets for cryptocurrencies. In December 2024, the country held approximately $75.7 billion (104 trillion won) in cryptocurrency. This market size underscores South Korea’s rising significance in the global digital asset landscape. The regulatory change in South Korea may prompt other Asian countries to reassess their approach to cryptocurrencies.
