South Korea Prepares Framework to Release Spot Bitcoin ETFs

• South Korea Considers Launching Bitcoin ETFs in Spotlight
• South Korean regulator assesses risks of cryptocurrency ETFs
• Dollar-denominated stablecoins worry South Korean authorities

South Korea’s Financial Services Commission (FSC) is drafting a detailed plan to facilitate the creation of exchange-traded funds (ETFs) based on spot cryptocurrencies, with a focus on Bitcoin. The proposal, which is still in the drafting phase, is expected to be presented in the second half of this year.

During a recent policy update to the State Affairs Planning Committee, the regulatory body highlighted that the measure seeks to assess impacts such as risks to financial stability and investor exposure. The FSC's focus also includes developing adequate infrastructure for the launch, management and supervision of digital asset ETFs.

NEW: 🇰🇷 South Korea's Financial Services Commission is creating a roadmap for launching Bitcoin spot ETFs, per Herald Economy. pic.twitter.com/sFjuHj7Iun

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This approach follows the campaign promises of President Lee Jae-myung, who advocated for the legalization of the issuance and trading of Bitcoin-linked ETFs, as well as other financial products backed by cryptocurrencies.

In parallel with the ETF initiative, the regulator is moving forward with the second phase of local legislation on digital assets. The new phase will focus on rules for listing tokens, disclosure standards, combating unfair market practices and improving exchange governance.

One of the central axes of the proposal is the alignment of stablecoin rules with international standards. The FSC has been particularly cautious about the expansion of dollar-backed stablecoins in the domestic market, which, according to Bank of Korea Governor Lee Chang-yong, could generate greater demand for dollars and cause negative macroeconomic effects on the won.

Another point of attention is the review of the fees charged by the country's main exchanges, such as Upbit, Bithumb and Coinone. The FSC intends to analyze the transparency of these charges and voluntary fee reduction policies, as part of a broader effort to protect users and strengthen trust in South Korea’s cryptocurrency ecosystem.