South Korea is set to join the growing list of countries embracing spot Bitcoin exchange-traded funds (ETFs), with the ruling People Power Party (PPP) announcing plans to legalize spot crypto ETFs within the year. This move is part of a broader seven-point agenda aimed at revitalizing the country's virtual asset ecosystem.

Key Reforms on the Horizon

The PPP’s proposal includes several major reforms:

Legalization of Spot Crypto ETFs: Investors will soon be able to gain exposure to cryptocurrencies like Bitcoin and Ethereum through regulated financial instruments.

Removal of the “One Exchange, One Bank” Rule: This change would allow crypto exchanges to partner with multiple banks, enhancing competition and consumer options.

Launch of a Token Securities STO Bill: The bill aims to establish a legal framework for security token offerings, bringing South Korea in line with international standards.

Regulation of Stablecoins: A new system will be introduced to oversee stablecoins, ensuring financial stability and investor protection.

Crypto-Specific Taxation System: A tailored taxation framework will provide clarity for digital asset investors and institutions.

Representative Park Soo-min emphasized the urgency of these changes, pointing out that global markets such as the U.S., U.K., and Hong Kong have already approved spot ETF trading.

Boosting Institutional Involvement

The reforms are expected to significantly increase institutional participation in the crypto market. Approximately 3,500 institutions — including 2,500 publicly listed companies and 1,000 professional investment firms — will be able to invest in cryptocurrencies without restriction by year-end.

This aligns with the rising interest in digital assets among South Korean investors, with more than 30% of the country's wealthy individuals already favoring crypto as a long-term investment option.

Political Landscape and Outlook

The PPP’s crypto-forward agenda comes as part of a broader political strategy ahead of upcoming elections. By pushing for regulatory modernization, the party aims to align South Korea’s financial markets with global trends and foster domestic innovation in the crypto space.

With the legalization of spot Bitcoin ETFs and comprehensive regulatory reforms, South Korea is poised to reshape its financial landscape and become a major player in the global digital asset economy.

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