- In South Korea, corporations are allowed to take a position as much as 5% in digital currencies.
- Solely the highest 20 cryptocurrencies on main exchanges are eligible.
- South Korea considers amending ETF regulation as spot digital forex ETF talks resume
South Korea is reopening its doorways to company crypto investments after practically a decade of strict rules, a change that might upend the nation’s digital asset panorama and draw institutional capital right into a market lengthy dominated by particular person merchants.
Regulators have formally lifted the 2017 ban, permitting listed corporations {and professional} traders to carry cryptocurrencies topic to obviously outlined limits.
Caps, safeguards, and asset limits
Below the brand new guidelines, corporations can allocate as much as 5% of their capital to digital belongings, and investments can be restricted to the highest 20 cryptocurrencies by market capitalization listed on South Korea’s 5 largest exchanges. Roughly 3,500 corporations are anticipated to be focused.
The coverage is the ultimate step in a reform plan introduced final 12 months by the Monetary Companies Fee, which units financial coverage. Officers say detailed buying and selling tips have already been circulated inside a public-private process power and last guidelines must be printed quickly, opening the market to company participation by the top of the 12 months.
Guardrail for cautious opening
Regulators are treading cautiously. The 5% cap is meant to restrict stability sheet threat and discourage extreme hypothesis by corporations. For now, the main focus is on massive liquid belongings reminiscent of Bitcoin and Ethereum, however the inclusion of dollar-pegged stablecoins like USDT continues to be being thought-about.
Officers are additionally planning technical safeguards, together with measures geared toward decreasing volatility as institutional liquidity flows into the system, reminiscent of proscribing sure order varieties and controlling trades that deviate considerably from market costs.
South Korea’s distinctive ban was launched amid considerations about cash laundering and runaway hypothesis. Since then, regulators say retail traders have come to dominate the market, a dynamic that has contributed to speedy value fluctuations and sustained capital flight.
ETFs are again on the agenda
Deregulation has re-emerged the controversy over spot crypto alternate traded funds (ETFs). Digital belongings are nonetheless excluded from eligible ETF underlying belongings below the Capital Markets Act, however within the authorities’s new Financial Progress Technique 2026, officers have confirmed that amendments are into account.
Issues are already underway on custody, pricing, and investor safety frameworks, laying the groundwork for approval, presumably beginning with Bitcoin-related merchandise.
World capital is paying consideration
Overseas traders are additionally stepping in. Andreessen Horowitz not too long ago established a presence in Seoul by means of its crypto sector, citing South Korea’s wealthy developer base and probably the most energetic retail crypto markets on this planet.
Anthony Albanese, Chief Working Officer of a16z Crypto, mentioned: “We plan to discover new methods to strengthen our place in Asia and develop our geographic footprint.” Different worldwide enterprise funds and accelerators, together with Plug and Play, are additionally increasing their native operations.
Associated: South Korean Supreme Court docket guidelines that cryptocurrency exchanges could be seized
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