According to the Financial Supervisory Service head, South Korean financial authorities are engaged in ongoing discussions about potentially enabling the trading of spot Bitcoin exchange-traded funds (ETFs) in the country.
South Korea’s Deliberation on Bitcoin ETF Approval
In a recent radio interview, FSS Governor Lee Bok-hyun revealed that regulators contemplate approving access to Bitcoin spot ETFs amid mixed views within the government bodies overseeing the crypto sector.
“There are optimistic perspectives about virtual assets like Bitcoin, but also more cautious views from other officials, we aim to gather public input as we expect broader regulatory developments for virtual assets later this year.” Lee said.
The potential approval of spot Bitcoin ETFs comes as South Korea pushes to be a leader in technological innovation, even as regulatory hurdles remain. South Korea’s capital markets laws do not yet clearly define the legal status of crypto assets like Bitcoin.
This January, financial authorities had indicated no plans to allow trading of Bitcoin ETFs. However, questions lingered about whether securities firms could sell such funds, prompting regulators to reopen discussions.
Beyond the domestic dialogue, Lee said the FSS plans formal consultations with the U.S. Securities and Exchange Commission in May about regulating advanced financial instruments tied to crypto assets like Bitcoin ETFs and non-fungible tokens.
South Korea’s potential embrace of spot Bitcoin ETFs would follow the move by U.S. regulators in January. Data shows U.S. Bitcoin ETFs have seen robust inflows, reaching $588 million on Mar. 4 as institutional investors like Fidelity and BlackRock pile in.
[1/4] Bitcoin ETF Flow – 04 March 2024
All data in. Very strong day with +$562m net flow. Fidelity very strong with a record day
Not the best day for diversity, with smaller players BTCO, HODL & BTCW all having outflows pic.twitter.com/drCrg6EzsN
— BitMEX Research (@BitMEXResearch) March 5, 2024
However, South Korea’s People Power Party also recently indefinitely postponed plans to relax broader cryptocurrency regulations amid challenges reaching a consensus within the government.
