South Korea is taking significant steps to support the digital asset market by moving closer to launching spot Bitcoin exchange-traded funds (ETFs). The Financial Services Commission (FSC), the country’s primary financial regulator, is developing a detailed roadmap to facilitate the introduction of these crypto-based spot ETFs, with a proposal expected later this year. This initiative aligns with President Lee Jae-myung's campaign promise to legalize Bitcoin ETFs and similar investment products.
The FSC's evaluation will cover potential risks to financial stability, investor protection, and the broader economic impact. Additionally, the commission aims to establish infrastructure to manage and list these ETFs safely while enforcing investor safeguards.
Beyond ETFs, the FSC is progressing into the second phase of its digital asset legislation, focusing on asset listings, disclosure requirements, market practices, and cracking down on unfair market behavior. A key regulatory aspect is aligning stablecoin oversight with international standards, especially concerning the influence of US dollar-denominated stablecoins and mitigating macroeconomic risks associated with won-pegged stablecoins.
Parallel to this, the FSC has announced an investigation into the transaction fees charged by major South Korean centralized exchanges (CEXs) including Upbit, Bithumb, and Coinone. This probe will analyze fee structures, collection methods, transparency, and the impact on consumers. It follows President Lee's pledge to reduce trading fees drastically to ease costs for young traders, from about 0.05% currently to 0.015%.
This comprehensive regulatory approach reflects South Korea's commitment to balancing innovation and investor protection as it reshapes its crypto market policies.