South Korea is making strides in the world of digital assets with a new bill proposed by lawmaker Min Byung-deok. The bill, introduced on June 27, aims to amend the Capital Markets Act to include digital assets like Bitcoin as underlying assets for ETFs.
This move comes as part of President Lee Jae-myung’s agenda to integrate digital assets into the financial system. The amendment would allow trust companies to legally hold and manage digital assets as trust property, with clear rules for delegation and custody.
Supporters of the bill believe that it provides a solid legal foundation for digital asset-based ETFs and improves investor protections through transparent trust management rules. It also includes measures to expand the derivatives market, enabling risk management strategies using digital assets.
However, skeptics warn that brokering digital asset derivatives requires stringent risk management. They argue that only firms with the capacity to handle such products should be allowed to offer them.
Currently, South Korea prohibits ETFs that use digital assets as underlying assets, forcing domestic investors to trade abroad or in unregulated markets. If approved, this new measure could create a regulated pathway for domestic investors to participate in this market.
The amendment would allow asset managers to develop financial products tied to digital assets, diversify the ETF market, and increase transparency and oversight in the sector. Lawmaker Min believes that this bill will promote growth while enhancing protections for Korean investors.
As global regulators grapple with frameworks for digital asset ETFs, countries are moving at different speeds, leading to regulatory arbitrage and inconsistent investor protections. Any shift in ETF rules could influence broader debates over digital asset taxation, reporting standards, and national growth strategies.
Overall, South Korea’s proposed bill represents a step forward in the integration of digital assets into the financial system. It has the potential to revolutionize the ETF market and provide new opportunities for investors while ensuring proper risk management and investor protections.
The original post was sourced from Cryptonews and maintained its key points and structure while providing a fresh perspective on South Korea’s move towards embracing digital assets.