In a major shift from its past crypto policies, South Korea is moving to bring spot ETFs and stablecoins into the heart of its financial system. With the government laying out a detailed plan, the country could see regulated crypto investment products hit the market as early as late 2025.
A Push Toward Legal Crypto ETFs
South Korea’s top financial regulator, the Financial Services Commission (FSC), submitted a new proposal this week outlining its plan to introduce spot crypto exchange-traded funds. The roadmap was handed to the Presidential Committee on Policy Planning and includes a framework for legal, regulated crypto ETFs, a big departure from the country’s previously cautious stance.
Under the roadmap, the FSC will prepare the legal and technical groundwork needed for these funds. That means building infrastructure for custody, pricing, operation, and fund management, as well as setting clear investor protection standards.
The government’s decision to support crypto ETFs comes just months after President Lee Jae-myung took office. Lee campaigned on a promise to legalize crypto ETFs and tighten investor safeguards. His pro-crypto stance marked a clear break from the past administration’s policies, which had banned crypto ETFs over concerns about market risk.
Since other major markets like the U.S. and Europe are already pushing forward with spot ETFs, South Korea’s move signals a desire to keep pace with global financial trends and to attract both retail and institutional investors back into the fold.
How This Could Change Crypto Access
Once the new rules take effect, investors in South Korea could soon gain a regulated way to buy and sell crypto through ETFs listed on local exchanges. That would offer a more familiar entry point for those still unsure about jumping directly into digital currencies.
And for those already active in the space, easier on-ramps are likely to follow. That includes guidance on how to buy Bitcoin with a credit card, a method becoming more common as regulators ease restrictions and payment providers catch up to demand. A regulated environment would likely boost consumer confidence in using more traditional payment methods to access crypto.
The FSC’s roadmap also aims to cut current trading fees, which hover around 0.05%. President Lee wants to reduce this to about 0.015%, with a focus on making crypto trading more affordable, especially for younger traders.
Stablecoins and Market Oversight
In addition to ETFs, the roadmap includes plans for a legal framework around Korean won-based stablecoins. These digital assets, pegged to the local currency, could be used for payments and remittances while keeping capital within South Korea. The move could help reduce reliance on offshore stablecoins like Tether or USDC, and give local firms a more regulated path to issue their own tokens. But the governor of the Bank of Korea mentioned that these should be issued by the central bank.
However, it’s not just about launching new products since the FSC is also pushing for stricter oversight. The commission wants tougher penalties for illegal market activity, including lifetime bans and steep fines for bad actors. Exchanges will face higher disclosure standards and will need to post transparent trading fees and listing rules. This part of the roadmap shows a clear focus on protecting investors without shutting down innovation.
Still Early, But the Direction Is Clear
Though the proposals are still in draft form, the message from regulators is loud and clear: the days of broad crypto restrictions in South Korea are fading. The FSC confirmed that none of the policies are final yet, and many will need approval from lawmakers before they can move forward. But even so, the shift is undeniable.
Industry analysts say the government is now following a similar path to other countries that have launched crypto ETFs. Risk assessment, custody rules, and monetary policy checks will all play a part in how the final rules are written. That means the pace could be slow, but steady.
The broader strategy is aimed at balancing two things: investor safety and global competitiveness. ETFs have already been approved in the U.S. since January 2024 and are gaining steam in the EU, so South Korea doesn’t want to be left behind.
A Growing Interest in Institutional Trading
Alongside consumer access, the roadmap also opens the door for institutional players. The FSC is reviewing phased approvals for large-scale crypto trading by banks and asset managers. If this goes through, it could inject a fresh wave of capital into the local market, especially if spot ETFs provide a bridge between traditional finance and crypto.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
