South Korea’s FSC announced its intention to allow corporate investments in digital assets on 8 January 2025.
According to local media reports, FSC Secretary-General Kwon Dae-young announced the move in a 2025 briefing. He said, “We need to discuss how to create listing standards, what to do with stablecoins, and how to create rules of conduct for virtual asset exchanges.”
He further added, “We will work to align with global regulations in the virtual asset market.”
SOUTH KOREA PLANS TO LIFT BAN ON INSTITUTIONAL TRADING OF CRYPTOCURRENCIES
– According to a recent report by Yonhap news agency, South Korea is planning to lift its de facto ban on local institutions trading crypto assets.
– The major South Korean news outlet cited the… https://t.co/ZPSBIjBL0l pic.twitter.com/vhoWWbt7h1
— BSCN (@BSCNews) January 8, 2025
Related: South Korea Delays 20% Crypto Tax For Third Time, Cites Regulatory Refinement
Phase 2 Virtual Asset Act Is On Its Way
The proposed changes extend beyond crypto investments.
Current regulations allow companies to hold up to 5% of stocks in non-subsidiary entities. The FSC plans to increase this limit to 15%, enabling corporations to exert greater operational control. Additionally, there are plans to relax consignment business regulations and enhance data-sharing mechanisms within financial holding groups.
The new framework also seeks to create rules of conduct for virtual asset exchanges, ensuring a fair and transparent trading ecosystem.
Following the implementation of the ‘Virtual Asset User Protection Act’ last year, the Phase 2 Virtual Asset Act, which includes regulations on the issuance and distribution of virtual assets, is also being promoted.
Corporate participation in crypto markets is likely to inject substantial liquidity into digital assets, fostering a more robust trading environment.
Related: Crypto Trading In South Korea Surpasses Stock Market With $18 Billion In 24 Hour
South Korea Could Boost Foreign Investment
By allowing corporations to invest in crypto assets, South Korea could boost investor confidence and attract foreign investment.
The focus on institutionalizing innovative financial services aligns with South Korea’s reputation as a global tech hub. This move could spur advancements in blockchain technology, decentralized finance (DeFi), and other emerging sectors.
By aligning its regulatory framework with international standards, South Korea positions itself as a key player in shaping the future of cryptocurrency governance.
Furthermore, South Korea plans to explore cryptocurrency exchange-traded funds (ETFs) and allow companies to issue security tokens in 2025.
According to local media reports, the South Korean government is reportedly considering the introduction of cryptocurrency ETFs.
In addition to crypto ETFs, South Korea is preparing to enable companies to issue security tokens starting in 2025.
Korea Exchange Chairman Eun-bo Jeong announced that he wants to explore new businesses such as virtual currency ETFs.
Pointing out the difficulties South Korea faced in 2024, Chairman Chung said, “Last year, our capital market went through considerable difficulties.” He added, “While the growth potential of our companies was weakened due to the contraction of the domestic economy and slowdown in exports, our market showed considerably sluggishness compared to major countries due to global conflicts and domestic political situations.”
While the country aims to create new growth engine for the capital market, Chung said that the country will continue to “benchmark overseas cases for new businesses such as virtual currency ETFs and explore new areas in the capital market.”
Related: South Korea To Explore Crypto ETFs And Enable Security Token Issuance In 2025
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