South Korea Preparing to Approve Spot Bitcoin ETFs in Crypto Policy Pivot

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South Korea Preparing to Approve Spot Bitcoin ETFs in Crypto Policy Pivot

South Korea is reportedly preparing to open its financial markets to spot bitcoin exchange-traded funds (ETFs) this year, marking a shift in the country’s long-standing approach to digital assets as regulators accelerate work on a comprehensive new crypto law.

The plan was outlined in the government’s newly released 2026 Economic Growth Strategy, with the Financial Services Commission (FSC) taking the lead on implementation. 

If approved, spot bitcoin ETFs would become available to domestic investors for the first time, placing South Korea alongside markets such as the United States and Hong Kong, where similar products have already attracted billions of dollars in inflows.

Until now, Korea’s capital markets rules have not recognized cryptocurrencies like bitcoin or bitcoin ETFs as eligible underlying assets for ETFs, effectively blocking their launch. That stance is now changing as policymakers look to bring more crypto activity into regulated channels and reduce the flow of capital to offshore platforms.

The bitcoin ETF push is moving in parallel with a broader overhaul of digital asset regulation. The FSC is fast-tracking what it calls “Phase Two” digital asset legislation, a bill expected to focus heavily on stablecoins. 

According to government plans, the law will introduce a licensing system for stablecoin issuers, minimum capital requirements, and strict reserve rules requiring at least 100% backing of issued tokens. Issuers would also be required to guarantee user redemption rights.

Regulators say the framework is designed to prevent failures like the 2022 Terra-Luna collapse, which wiped out roughly $40 billion and had deep ties to South Korea. 

Alongside domestic rules, authorities are drafting standards for cross-border stablecoin transfers and transactions, reflecting growing use of digital tokens in trade and remittances. The effort is being coordinated between the FSC and the Ministry of Economy and Finance.

Global bitcoin ETF implementation

Officials point to global precedents as a key influence. Spot bitcoin ETFs in the U.S. and Hong Kong have seen strong demand, with major asset managers now treating the products as mainstream investment tools. 

Korea’s Financial Intelligence Unit estimates that more than 10 million people are eligible to trade digital assets domestically, underscoring the scale of potential demand.

Beyond private markets, blockchain is also moving into public finance. The government plans to digitize parts of the national treasury using so-called “deposit tokens,” a form of government-linked digital currency distinct from stablecoins, according to reports.

By 2030, up to 25% of treasury operations could be conducted via blockchain-based payments.

Pilot programs are already underway, and lawmakers are reviewing amendments to the Bank of Korea Act and the National Treasury Act to establish a legal foundation for these systems. 

Officials say the goal is faster settlement, lower administrative costs, and improved transparency.

This post South Korea Preparing to Approve Spot Bitcoin ETFs in Crypto Policy Pivot first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

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