South Korea’s financial regulator is taking steps to support the launch of digital asset spot exchange-traded funds, according to a recent report by Herald Economy. The Financial Services Commission (FSC) is working on a detailed roadmap for the introduction of crypto-based spot ETFs, with plans to unveil the proposal in the second half of the year.
The FSC’s initiative aligns with President Lee Jae-myung’s campaign pledges to allow the issuance and trading of Bitcoin-based ETFs and other digital asset investment products. The regulator will assess the potential risks to financial stability, investor exposure, and the broader economy before implementing the ETF rollout.
In addition to the ETF launch, the FSC is moving forward with the second phase of its digital asset legislation. This next phase will focus on regulations for asset listings, disclosures, business practices, and cracking down on unfair market activity. The agency aims to align stablecoin rules with international standards while safeguarding users and enhancing market transparency.
South Korean authorities are particularly concerned about the increasing influence of US dollar-denominated stablecoins in the domestic market. The governor of the Bank of Korea, Lee Chang-yong, warned that won-pegged stablecoins could boost demand for the US dollar, posing macroeconomic risks.
Furthermore, the FSC plans to conduct a market-wide review of transaction fees charged by local crypto exchanges, starting with major platforms like Upbit, Bithumb, and Coinone. The review will assess the fee structures, transparency of fee disclosures, and voluntary fee reductions on these exchanges.
Overall, South Korea’s regulatory efforts demonstrate a commitment to balancing innovation with user protection as the country reshapes its crypto market policy. The FSC’s roadmap for digital asset spot ETFs and stablecoin oversight reflects a proactive approach to regulating the growing cryptocurrency market.