South Korea to flip bitcoin ETF stance as part of broader crypto push

South Korea plans to open its markets to spot bitcoin BTC$66,367.10 exchange-traded funds (ETFs) this year, part of a broader digital asset push led by the Financial Services Commission (FSC) under its 2026 economic growth strategy.

Until now, cryptocurrencies like bitcoin weren’t legally recognized as valid underlying assets for ETFs, blocking the creation of these products in the country.

The FSC appears to be following the lead of other jurisdictions, including the U.S. and Hong Kong, where spot bitcoin ETFs have seen significant success. A BlackRock (BLK) executive even said these funds are the top revenue source at the world’s largest asset manager.

The Korea Financial Intelligence Unit (KoFIU) has found that in the first half of last year, the country had 10.7 million users eligible to trade and that average trading volume stood at 6.4 trillion Korean won ($4.39 billion).

The government is also drafting a new Digital Asset Act, focused on regulating stablecoins according to local media. The law is expected to introduce a licensing regime for stablecoin issuers, require 100% reserve backing, and guarantee user redemption rights.

It will also outline how stablecoins can be traded or transferred across borders.

Separately, South Korea is looking to digitize public funds using deposit tokens, government-issued digital tokens distinct from stablecoins. The goal is to convert 25% of treasury operations to blockchain-based payments by 2030.

Pilot programs are already underway, and changes to laws governing the central bank and treasury are expected this year.