- U.S. and Hong Kong approvals may influence South Korea’s approach to cryptocurrency investments.
- The Financial Services Commission’s response to spot ETFs could shape the future of crypto investments.
South Korea’s recently elected government, led by the Democratic Party of Korea, is showing its dedication to Bitcoin-related promises. The party plans to request a formal response from the Financial Services Commission on Bitcoin spot Exchange-Traded Funds (ETFs) in June, aiming to deliver on its election commitments.
A Democratic Party policy committee member confirmed these intentions in a phone interview. The representative stated, “After the 22nd National Assembly opens in June, we will seek an authoritative interpretation of Bitcoin spot ETFs from the financial authorities.”
In the past, the party pledged to allow the issuance and trading of spot ETFs that use cryptocurrencies like Bitcoin as foundational assets. This was a notable campaign promise.
Currently, South Korean financial regulators prohibit the issuance and trading of Bitcoin spot ETFs. They argue that Bitcoin spot ETFs are not classified as financial investment products because cryptocurrencies are not listed as underlying assets for ETFs under the Securities Act.
However, this stance could change due to recent international developments. The United States approved a Bitcoin spot ETF in January, and Hong Kong recently began trading Bitcoin and Ethereum spot ETFs. These actions might prompt South Korea to reassess its regulatory perspective.
This initiative from the Democratic Party aligns with international trends in the cryptocurrency industry. Spot ETFs directly track Bitcoin prices, unlike futures ETFs that follow Bitcoin futures contracts.
The financial authorities’ forthcoming response will be carefully watched, as it could establish a precedent for financial products involving cryptocurrencies in South Korea. The Democratic Party’s proposal illustrates the government’s changing stance on digital assets, which are increasingly significant in global finance.
By considering these international developments, South Korea aims to become a competitive player in the expanding digital asset market. Approval of Bitcoin spot ETFs could serve as an important step in integrating cryptocurrency investments into the national financial system.
The current price of Bitcoin is $63,112.63 USD.
