South Korea To Reconsider Crypto ETFs In 2025 Amid Global Demand

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As a seasoned crypto investor with over a decade of experience navigating the volatile world of digital assets, I find the recent announcement by the South Korea Stock Exchange Chairman, Jeong Eun-bo, to explore crypto-based ETFs both intriguing and promising. Having witnessed the rapid evolution of the crypto market since its inception, I am well aware that regulatory hurdles have often stifled growth in this region.

However, with the recent shift in South Korea’s stance on digital assets, there seems to be a glimmer of hope on the horizon. The success of spot Bitcoin and Ethereum ETFs in their first year has undoubtedly caught the attention of policymakers, pushing them to reconsider their previous ban on crypto ETFs.

That being said, I remain cautiously optimistic about this development, as South Korea’s political crisis continues to pose a significant challenge to new regulations. The ongoing standoff between President Yoon Suk Yeol and the National Assembly has delayed the resolution of this issue, but I am hopeful that a resolution will come soon so we can finally see some movement in the crypto space in South Korea.

As for my personal investment strategy, I always advise investors to approach digital assets with a long-term perspective and a healthy dose of skepticism. The crypto market is notoriously volatile, and it’s essential to stay informed about regulatory developments in different regions. With that said, I believe that the potential approval of crypto ETFs in South Korea could bring new opportunities for growth and diversification in my portfolio.

Lastly, let me leave you with a little joke to lighten the mood: Why don’t cryptocurrencies ever get lost? Because they always follow the blockchain!

On a Thursday announcement, the chairperson of South Korea’s Stock Exchange, Jeong Eun-bo, disclosed their intention to investigate the possibility of endorsing crypto exchange-traded funds (ETFs) as part of their “value-up program” in response to current market difficulties.

Korea Exchange To Explore Crypto ETFs

On January 2nd, Jeong Eun-bo revealed that the Korea Exchange intends to investigate crypto-based ETFs this year during the 2025 Securities and Derivatives Market opening ceremony. The Chairman expressed that South Korean capital markets encountered considerable hurdles in 2024, which has diminished the growth prospects of domestic firms.

Additionally, Jeong pointed out that international disputes and local political shifts have resulted in a noticeably slow pace in the market relative to larger nations. This upcoming year, the South Korean market may encounter risks due to unfavourable domestic and global economic circumstances.

Nevertheless, the Chairman outlined that the exchange plans to carry on with its value-focused initiative aimed at attracting prominent businesses and fostering a corporate culture that emphasizes shareholder value.

As a researcher, I can share that according to Jeong’s recent disclosure, the Korea Exchange is planning to study successful cases from abroad to expand into novel sectors like cryptocurrency ETFs. Additionally, they aim to venture into uncharted territories within the capital market.

It’s important to mention that exchange-traded funds (ETFs) based on cryptocurrencies have been disallowed in South Korea since 2017. The country’s financial regulator, the Financial Services Commission (FSC), has maintained this prohibition even after the U.S. Securities and Exchange Commission (SEC) approved such crypto-related investment products last year.

As a crypto investor, I’ve noticed a promising change in the regulatory landscape. Back in October, the financial watchdog announced the formation of an advisory group to reconsider the ban on digital assets, suggesting a potential softening of stance towards regulation. This apparent shift appears to be driven by the remarkable success of spot Bitcoin and Ethereum ETFs. In their inaugural year, these ETFs outperformed most experts’ predictions, indicating a growing acceptance and confidence in this space.

South Korea’s Political Crisis Stopping New Regulations

Previously, the head of the Korea Exchange advocated for the establishment of a structured system for cryptocurrencies within South Korea, stating that such a move would generate additional worth. Jeong emphasized that it’s time for lawmakers and financial institutions to reassess their perspective on digital assets, pointing out that the industry has expanded significantly and now carries considerable influence in today’s world.

The Chairman suggested that South Korea might benefit from integrating digital assets within their institutional financial system. This move could provide a boost needed for South Korea to remain competitive in the global market against other nations.

The regulatory position regarding digital assets has kept the market from surpassing multiple regulatory hurdles for quite some time, hindering its growth and competitiveness. Yet, the development of cryptocurrency regulations has been put on hold until the political situation is resolved, which might take several months.

Last month, President Yoon Suk Yeol enacted South Korea’s initial martial law in forty years. He claimed that the ruling Democratic Party, which holds a majority in the National Assembly, harbors sympathies towards North Korea and engages in actions detrimental to the state.

After a swift six-hour decision, the National Assembly annulled the President’s decree, effectively terminating the emergency martial law. Since that time, they have proceeded to impeach both Yoon and Prime Minister Han Duck-soo. With Yoon’s powers temporarily suspended, Han Duck-soo has taken on the role of acting president.

Reports by the Associated Press indicate that South Korea’s presidential security service engaged in a six-hour standoff with authorities to prevent the arrest of Yoon at his residence, which is where the impeached president resides.

Consequently, the anti-corruption agency intends to urgently request Deputy Prime Minister Choi Sang-mok to order the relevant service to carry out the arrest warrant as directed.

The Supreme Court is poised to decide if Yoon should be dismissed or reinstated. A dismissal would occur only if at least six out of the nine judges on the bench vote for it.

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2025-01-04 16:12