South Korean Regulators Prepare for Spot Crypto ETFs This Year

In brief

The FSC has submitted an implementation plan for spot crypto ETFs to the Presidential Committee.
Korean won-based stablecoins are also set for regulatory approval by year-end.
The move reverses a previous ban from 2017, which cited concerns about financial stability.

South Korea’s Financial Services Commission submitted plans Thursday to introduce spot crypto ETFs by the second half of 2025, marking a reversal of the country’s previously restrictive crypto policies as a new government takes the helm.

The roadmap, filed with the Presidential Committee on Policy Planning, outlines implementation measures for spot crypto ETFs while establishing investor protection frameworks, including custody, operation, and evaluation standards, according to an initial report from Yonhap, the country’s largest news agency.

The plan would take into account “risks related to the linkage of financial and virtual asset markets, the impact on the real economy, and investor benefits,” the FSC stated in its report to the State Affairs Planning Committee.

The FSC’s plan also includes lifting restrictions on Korean won-based stablecoins, addressing concerns about domestic capital outflow. The commission previously banned crypto ETFs, citing financial stability risks and viewing cryptocurrency as unsuitable base assets.

But while the plans are ambitious, their details are not final and would still need to be discussed by the country’s lawmakers, the regulator said.

“The specific details of the matters discussed in the National Planning Committee’s briefing are difficult to confirm and have not been finalized,” a rough translation of a statement issued Friday by the FSC reads.

The commission is also working to process phased approvals for institutional crypto trading, signaling broader reform that could see market liberalization.

Those regulatory shifts appear to fulfill President Lee Jae-myung’s campaign pledge to approve spot crypto ETFs, following the successful U.S. launch that channeled billions in institutional capital and propelled Bitcoin to record highs.

The newly elected government’s friendly stance to crypto has since continued. Earlier this month, he proposed the Digital Asset Basic Act, which, if approved, would allow local companies to issue their own stablecoins.

Industry observers expect the ETF launch to follow similar risk assessment protocols used in traditional markets, in particular “around regulatory frameworks, monetary policy coordination, and technical implementation,” Min Jung, an analyst at Presto Research, told Decrypt earlier this month.

Edited by Sebastian Sinclair