South Korea’s Financial Services Commission (FSC), the nation’s top financial regulator, is actively developing a detailed roadmap for the introduction of digital asset spot Exchange-Traded Funds (ETFs). The initiative, revealed during a policy update to the State Affairs Planning Committee, is set to be proposed in the latter half of the year.
The FSC’s plan will thoroughly assess the implications of launching crypto-based spot ETFs, examining potential risks to financial stability, investor exposure, and the broader economy. Alongside this, the agency aims to build the necessary infrastructure for listing and managing these ETFs while implementing robust investor safeguards. This move aligns with President Lee Jae-myung’s campaign pledges, which advocated for allowing the issuance and trading of Bitcoin-based ETFs and similar digital asset investment products.
Beyond the ETF framework, the FSC is progressing with the second phase of its digital asset legislation. This next stage will focus on critical regulatory areas including asset listings, disclosures, business practices for digital asset firms, and stricter measures against unfair market activities.
A significant component of this legislative push involves aligning stablecoin regulations with international standards, with a strong emphasis on user protection and enhancing market transparency. South Korean authorities are particularly attentive to the increasing presence of US dollar-denominated stablecoins within the domestic market. Lee Chang-yong, Governor of the Bank of Korea, recently voiced concerns that won-pegged stablecoins could inadvertently boost demand for the US dollar, posing macroeconomic risks.
In a related development, the FSC is reportedly set to launch a comprehensive market-wide review of transaction fees levied by local cryptocurrency exchanges. The review will initially target the country’s largest exchanges, including Upbit, Bithumb, and Coinone. Key areas of investigation will include the structure of these platforms’ fees, the transparency of their disclosure, and the extent of any voluntary fee reductions.
