South Korea’s Ministry of Economy and Finance confirmed a major policy reversal Friday, officially including the launch of spot crypto exchange-traded funds (ETFs) in its newly released 2026 Economic Growth Strategy. The move tasks the Financial Services Commission (FSC) with amending the Capital Markets Act to classify cryptocurrencies as valid underlying assets for investment products, a legal designation previously denied by regulators.
The Capital Markets Amendment
The core obstruction to Korean crypto ETFs has been the legal definition of “underlying assets” in Article 4 of the Capital Markets Act, which effectively banned institutions from building crypto-structured products. Under the new directive, the FSC will lead a legislative push to expand this definition, aligning Seoul with markets like the U.S. and Hong Kong.
According to local reports, the Korea Exchange (KRX) has already indicated technical readiness to list these products once the legal framework is ratified.
Phase 2: Strict Stablecoin Controls
The strategy also accelerates “Phase 2” of the country’s Digital Asset Basic Act, specifically targeting stablecoin issuers. Key provisions set to be finalized in Q1 2026 include:
- 100% Reserve Requirement: Issuers must hold reserves equal to or exceeding the total value of tokens in circulation.
- Redemption Guarantees: Mandatory legal rights for holders to redeem tokens for fiat upon request.
- Issuance Licenses: A new licensure framework restricting issuance to entities meeting specific capital thresholds.
Market Reaction
Despite the regulatory breakthrough, Bitcoin (BTC) remained flat, trading near $90,300 (-0.7%) during Asian hours. The muted reaction suggests the market had largely priced in the shift following President Lee Jae-myung’s election earlier this year, where crypto deregulation was a central campaign promise.
“The FSC appears to be following the lead of other jurisdictions… where spot bitcoin ETFs have seen significant success.”, CoinDesk Analysis Team
The strategy further outlines a long-term goal to tokenize 25% of national treasury fund executions by 2030, signaling a broader institutional embrace of blockchain rails beyond speculative assets.
