South Korean regulators push crypto ETF plan to power up local market

South Korea’s top financial watchdog is taking steps to bring spot crypto ETFs and stablecoin regulation into the mainstream as part of a broader plan to modernize the country’s digital asset market.

According to a June 19 report by local media Yonhap News, the Financial Services Commission (FSC) has submitted a new crypto roadmap to the Presidential Committee on Policy Planning. The plan sets the stage for launching spot cryptocurrency exchange-traded funds (ETFs) and regulating stablecoins by the second half of 2025.

Regulators will build the necessary legal and technical infrastructure to support the ETFs, including rules around fund structuring, custody, pricing, and investor protection. 

The FSC’s push aims to align the local digital market scene with global standards, following increased calls from advocates within the region who argue that without action, the country risks falling behind other major markets. 

Earlier this year, South Korea’s newly elected President, Lee Jae-myung, pledged to legalize spot crypto ETFs as part of his campaign. He also promised to create a unified oversight system to better protect investors and increase market transparency.

In addition to the ETF reforms, the commission is working on legislation to govern the issuance of Korean Won-based stablecoins. It will also tighten rules around how virtual assets are listed and disclosed, as well as how local crypto businesses and service providers operate.

Another major focus of the roadmap is tougher enforcement. The FSC plans to introduce stricter penalties for misconduct, including permanent bans and heavy fines for individuals or firms involved in illegal activities.

Local exchanges will also be required to cut trading fees and improve transparency by publicly disclosing and comparing fees. This aligns with President Lee’s earlier pledge to lower transaction fees from the current average of 0.05% to around 0.015%, as part of efforts to support young traders.

While the roadmap marks a major step forward in the nation’s ambitions, the FSC has emphasized that none of the proposals are confirmed or finalized yet, suggesting that the plan is still in its early stages.