South Korea's Stock Exchange chairman, Jeong Eun-bo, has announced plans to explore the approval of crypto-based exchange-traded funds (ETFs) in 2025 as part of a broader strategy to enhance the value of the capital markets.
The South Korean market has been facing challenges due to global conflicts and domestic political turmoil, leading to sluggish performance. Despite these challenges, the Korea Exchange remains committed to attracting leading companies and fostering a management culture focused on shareholder value.
The exploration of crypto ETFs is seen as a potential avenue for revitalizing the market and enhancing its competitiveness. Since 2017, crypto ETFs have been banned in South Korea, but there has been a recent shift in regulatory sentiment, with the Financial Services Commission (FSC) forming an advisory group to review the ban.
Jeong has advocated for the institutionalization of cryptocurrencies in South Korea, believing it is crucial for revitalizing the market. However, the current political crisis in South Korea is stalling any new regulations regarding digital assets. The ongoing political instability has created a challenging environment for the South Korean capital markets, which are currently unable to cross various regulatory thresholds necessary for growth.
The exploration of crypto ETFs by the Korea Exchange could signal a pivotal shift in South Korea's approach to digital assets, potentially opening the door for institutional investment and greater market participation. The success of crypto ETFs in other markets may serve as a compelling case for South Korea to reconsider its regulatory stance.
The Korea Exchange's commitment to benchmarking overseas cases for new business avenues, including crypto ETFs, reflects a proactive approach to navigating the complexities of the current market environment and revitalizing South Korea's capital markets.