South Korea Advances in Crypto ETF Arena Amid Regulatory Hurdles

South Korea's Crypto ETF Progress

South Korea is witnessing a surge in interest for crypto exchange-traded funds (ETFs) and derivatives as the Korea Exchange (KRX) aims to modernize its capital markets. During a recent event, KRX Chairman Jeong Eun-bo emphasized the exchange's readiness to support crypto ETFs, despite ongoing regulatory reviews.

Efforts to Overcome the 'Korea Discount'

Jeong highlighted initiatives to address the 'Korea discount,' where domestic stocks are undervalued compared to global counterparts. In contrast, Bitcoin often trades at a premium on local platforms. KRX is also exploring 24-hour trading and enhancing digital finance infrastructure.

Regulatory Challenges

Regulatory approval remains a significant hurdle. Current regulations do not classify crypto assets as eligible securities, preventing the launch of crypto ETFs. The Financial Services Commission is exploring potential reforms to recognize digital assets within the Capital Markets Act framework.

Support for Crypto ETFs Grows

Support for crypto ETFs is building in South Korea's financial and political sectors. The Korea Financial Investment Association has advocated for Bitcoin and Ether ETFs. Additionally, President Lee Jae-myung pledged to approve spot crypto ETFs during his campaign.