South Korea’s Stance on Crypto ETFs
The Financial Services Commission (FSC) in South Korea remains firm in its decision to prohibit financial institutions from investing in cryptocurrencies, including the launch of any crypto exchange-traded fund (ETF) within the country. An official from the FSC emphasized the government’s commitment to maintaining stability and protecting investors by not allowing virtual asset investments.
The official reiterated that there is no reason to change the government’s policy and that it has not been under review. This stance is in contrast to the recent authorization of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC).
Bitcoin Premium Surge in South Korea
On January 11, 2024, bitcoin’s trading value in South Korea surpassed the global average. Platforms like Upbit and Bithumb recorded prices above $49,000, with a substantial trading volume of $7 billion and $2.9 billion, respectively. South Korean won transactions accounted for 8.74% of all global bitcoin transactions on that day.
Despite the opposition from South Korean financial regulators to these premium rates, the trend continues. The government’s position on crypto assets has been clear since December 2017 when it announced emergency measures to prohibit financial institutions from holding or investing in digital currencies.
Maintaining the Status Quo
The recent approval of spot ETFs by the SEC in the U.S. does not change the stance of the South Korean government. The official from the FSC pointed out that other countries like Hong Kong, Germany, and Canada already operate spot ETFs, but the SEC’s decision is not significant enough to move the domestic market in South Korea.
Hot Take: South Korea Holds Firm Against Crypto ETFs
As South Korea experiences a surge in bitcoin prices and trading volume, the country continues to stand firm on its ban on financial institutions investing in cryptocurrencies and launching ETFs. The government’s emphasis on stability and investor protection has led to the maintenance of its policy, despite recent approvals in the U.S. and other countries. This steadfast approach sets South Korea apart from its global counterparts in the crypto industry. As the premium prices persist, it remains to be seen whether the government’s position will shift in the future to accommodate the growing demand for crypto ETFs.
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