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South Korea Considers Bitcoin ETFs Following Japan’s Lead in Crypto Regulation
- Japan’s FSA is reviewing treatment of crypto assets as securities, potentially enabling cryptocurrency ETFs.
- South Korea’s financial regulators are studying Japan’s approach to crypto ETFs, with KRX Chairman Jung warning the country risks falling behind global markets.
- Although both nations move toward easing their stance on the sector, there’s a lack of clear timelines for ETF approvals.
Following an easing of their crypto stance, Japan and South Korea seem to be warming up to the idea of crypto exchange-traded funds (ETFs). In February the Financial Services Agency (FSA) of Japan said it was considering treating crypto assets (virtual currencies) more like securities under financial instruments regulations, as Japanese news portal Nikkei reported.
The agency is exploring stricter disclosure requirements for crypto businesses to protect investors, potentially enabling the creation of cryptocurrency-based ETFs.
To assess the adequacy of current regulations, the FSA has initiated a private expert panel to review and possibly revise Japan’s cryptocurrency regulatory framework.
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And it appears that South Korea is now taking a leaf out of Japan’s playbook. As per local business publication Maeil, the South Korean financial regulator, the Financial Supervisory Service, is looking at its neighbour for guidance on crypto-based ETFs.
The vice chairman of South Korea’s Financial Services Commission (FSC), Kim So-young, commented after a virtual asset committee meeting that a review was ongoing.
I have continued to say that I would carefully review [spot Bitcoin ETFs], and it is similar in the broader context. There are countries that have not yet introduced it. There are England and Japan.
Kim So-young, FSC vice chairman KRX Chairman Says Country Could Be Left Behind
The chairman and CEO of the Korea Exchange (KRX), Jeong Eun-bo, said in an interview that the country risks being left behind as others around the globe make a move.
South Korea has a large crypto-trading population, and is, per the chairman, the “third-largest real cryptocurrency trading country”.
Jung highlighted the US Bitcoin and Ethereum ETFs, which have been actively traded for some time, and underscored their potential for wealth generation.
Cryptocurrency represents a sector capable of generating new value in the financial industry […] We must not delay the introduction of cryptocurrency ETF trading.
Jeong Eun-bo, chairman and CEO of the Korea Exchange Uncertain Timeline for ETF Approval
In February, the FSC said it would soon allow corporate “virtual asset” trading, in a move welcomed by the industry.
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Corporations were banned from trading digital assets in 2017, “to help ease the highly speculative market conditions”. The process is expected to take the FSC most of the year to complete.
There’s no definitive roadmap on the ETF path yet however, though it’s likely that FOMO would kick in once Japan gets serious about ETFs.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
