The South Korean Government Maintains Ban on Bitcoin ETFs
Following the approval of a spot Bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC), the South Korean government has reiterated its commitment to maintaining the ban on such products. South Korean regulators have made it clear that cryptocurrencies will not be recognized as financial assets, and there will be no policy shift.
Financial Stability and Investor Protection
Since 2017, South Korea has taken a strict stance on cryptocurrencies, prohibiting financial institutions from investing in them. The Financial Services Commission (FSC) emphasizes that this approach is aimed at stabilizing the financial market and protecting investors.
An official from the FSC reaffirmed this commitment, stating that the government has consistently maintained the principle of prohibiting financial institutions from investing in virtual assets. He emphasized that there are no changes in their stance.
South Korea Cites Stability Concerns
South Korean financial authorities oppose including cryptocurrencies as underlying assets for ETFs and argue that the U.S. financial sector was able to withstand the collapse of the virtual asset market because it also prohibits financial institutions from investing in them.
SEC Chairman Gary Gensler clarified that the approval of the spot Bitcoin ETF was limited to cash exchange-traded products holding Bitcoin and does not signal an intention to approve listing standards for virtual asset securities.
Hot Take: South Korea Stays Firm on Bitcoin ETF Ban
The South Korean government remains steadfast in its ban on Bitcoin ETFs, despite recent developments in other countries. The country’s focus on financial stability and investor protection drives its decision to prohibit financial institutions from investing in cryptocurrencies. South Korean regulators argue that including cryptocurrencies as underlying assets for ETFs would pose stability concerns for their financial market. While the U.S. has approved a spot Bitcoin ETF, this decision is not indicative of a change in South Korea’s stance. The debate continues, with some suggesting the introduction of a Bitcoin ETF due to low volatility. However, for now, South Korea maintains its position and upholds the ban on these products.
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