What To Know:
- South Korea plans to introduce spot crypto ETFs under its 2026 Economic Growth Strategy.
- Authorities are preparing a second wave of crypto legislation focused on stablecoin licensing, capital requirements, redemption rights, and cross-border compliance, alongside broader updates to financial laws.
- Regulatory progress has attracted institutional attention, supported by venture funding reforms, Binance’s return via Gopax, and government plans to use blockchain and deposit tokens in public finance.
South Korea is laying the groundwork for the introduction of spot crypto ETFs (exchange-traded funds), a move that signals a broader push to integrate cryptos into the country’s regulated financial system by 2026. The initiative forms part of the government’s newly announced 2026 Economic Growth Strategy and places crypto markets firmly within the scope of national financial planning.
South Korea to Launch Crypto ETFs
Key policy documents and local reporting indicate that South Korean regulators are planning to launch spot crypto ETFs, after scrutinizing how such products will be included within securities law. The Financial Services Commission is evaluating whether the Capital Markets Act could possibly accommodate spot crypto ETFs, or whether amendments will need to come in order to set custody, valuation, and investor protection standards for crypto. The direction tracks changes in other major markets. Spot Bitcoin ETFs are currently trading in the United States, as well as Hong Kong, and provide institutional investors with regulated crypto exposure without actually owning it.
A proposal that South Korea could make would place its financial markets in line with global standards that are more and more accepting crypto-linked products in broad investment portfolios. “Work on a second wave of crypto legislation will commence this year,” officials have said. Regulation of stablecoins has become a central pillar of the framework, following ETF planning. Some suggested rules are expected to cover issuers licensing requirements, minimum capital thresholds, and redemption rights for holders. Compliance procedures for cross-border stablecoin transfers have been outlined, which has been driven by regulators’ worries over capital controls and financial stability as the system becomes more widely adopted.
Investor protection is still a stated priority. Policy-makers have also discussed transparency of reserves and oversight mechanisms with regulators. Although there have been attempts to outline reserve and reporting requirements, regulators have not agreed on which institutions should be allowed through the new regime to issue stablecoins. We have received positive reactions from market participants on the ETF roadmap. Korea Exchange Chairman Jeong Eun-bo says the exchange is technically ready to support crypto-backed ETFs, once regulatory approval is received. This preparedness is widely recognised as a sign that infrastructure does not pose as major a barrier as it once was.
Regulatory clarity has become the decisive factor.
Institutional interest in South Korea’s crypto market has been building steadily. In September last year, the government lifted a long-standing ban that restricted crypto-related firms from accessing venture capital. The policy change allowed blockchain startups to qualify for venture certification, opening new funding channels and accelerating domestic innovation.
Global players have also moved in. Binance, the world’s largest crypto exchange by trading volume, completed its acquisition of local exchange Gopax late last year, marking its return to the South Korean market after prolonged regulatory delays. The deal highlighted renewed confidence among international firms as the country moves toward clearer crypto rules.
Beyond ETFs and stablecoins, authorities are exploring broader applications of blockchain technology in public finance. One proposal under consideration involves the issuance of a deposit token, a crypto backed by commercial bank deposits. According to policy plans, up to a quarter of the nation’s treasury operations could be conducted using such instruments by 2030.
To support this effort, the government intends to establish a legal framework for blockchain-based payment and settlement systems by the end of this year. This would require revisions to both the Bank of Korea Act and the Treasury Administration Act. Officials have also discussed the development of wallets capable of managing deposit tokens for government-related expenditures.
