South Korea's financial landscape may see a major shift as the country plans to explore cryptocurrency-based exchange-traded funds (ETFs) in 2025, marking a potential reversal of its 2017 ban on such investment products.
Korea Exchange chairman Jeong Eun-bo announced this development at the 2025 Securities and Derivatives Market opening ceremony on January 2. The move comes as part of the exchange's "value-up program" aimed at boosting market competitiveness and addressing ongoing economic challenges.
"We will benchmark overseas cases for new business avenues such as crypto ETFs and explore new territory in the capital market," stated Jeong during the ceremony. This announcement reflects a changing attitude toward digital assets in South Korea's financial sector.
The country's Financial Services Commission (FSC) had maintained a strict stance against crypto ETFs since 2017. However, following the successful launch of spot Bitcoin and Ethereum ETFs in the United States, the FSC formed an advisory group in October to review its existing ban.
The timing of implementation remains uncertain due to ongoing political turbulence in South Korea. The country is currently navigating a complex political crisis, with President Yoon Suk Yeol facing impeachment proceedings and the government operating under interim leadership.
Market observers note that this initiative aligns with global trends in cryptocurrency investment products. The Korea Exchange's chairman has previously advocated for the institutionalization of digital assets, emphasizing their growing influence in global financial markets.
The proposed exploration of crypto ETFs represents a strategic move to enhance South Korea's market competitiveness. However, concrete regulatory changes will likely await resolution of the current political situation, which industry experts suggest could take several months.
This potential policy shift could mark a new chapter in South Korea's approach to digital asset investments, possibly opening doors for institutional investors while maintaining regulatory oversight in the cryptocurrency space.