The Evolution of Korean Cryptocurrency Regulations: What to Expect for Crypto ETFs in 2025, Will They Finally Gain Approval?

The South Korean government is moving toward cryptocurrency integration by discussing the approval of crypto-based ETFs. Political and financial leaders are now evaluating Korean cryptocurrency regulations. They highlight the need for necessary infrastructure and investor protection. The Financial Services Commission remains cautious, but some officials urge faster adoption to align with global trends. Recognizing this sector’s economic potential, the government is exploring policies to support its expansion. These discussions signal a shift toward broader acceptance of digital assets in Korea.

PPP Leader Signals Potential Green Light for Crypto ETFs

The leader of the South Korean government’s leading party has confirmed that the government is considering crypto-based exchange-traded funds. Leader of the People Power Party (PPP), Kweon Seong-dong, has met with the executives of the crypto exchanges. As seen in Picture 1, he attended the National Assembly and stated that the party might approve crypto ETFs after revisions.

Image 1- Provide by Yonhap, published in The Korea Times, March 7, 2025. 

Seong-dong also mentioned that officials will review these products and their global effects. He added to enhance the digital assets market, the need for systematic improvements is clear. Moreover, the importance of appropriate infrastructure and regulatory frameworks was also mentioned in the statement. Finally, The South Korean party leader stressed the importance of user protection and market development. He pointed out that these considerations are inevitable as crypto market adoption and volume grow exponentially.

FSC Remains Cautious as Calls for Crypto Adoption Grow

More officials from the Korean financial sector considering crypto adoption are, becoming clear as the country’s FSC has been considering ETFs. South Korea’s Financial Services Commission has been reviewing Bitcoin ETFs for almost a year now. The result has not been very positive, as the regulatory institution has shown a cautious approach toward crypto. However, as the economic trends progress, some South Korean officials have expressed the need for progress. 

Seo Yoo-Seok, the Financial Investment Association Chairman, stressed how the nation needs to start adopting crypto ETFs. He exclaimed, “While the virtual asset market is projected to continue its expansion, Korea should not be left out.”. Another official, the chairman of the Korea Exchange (KRX), has also warned about the potential loss for the Korean financial sector. Jung Eun-bo has stated, “Cryptocurrency represents a sector capable of generating new value in the financial industry.”. He also added, “We must not delay the introduction of cryptocurrency ETF trading.”

South Korea Recognizes Crypto’s Economic Impact

Based on the reports, the general progress and growth of the crypto industry have been exponential. As it is reported, the daily average trading on Korean crypto exchanges even surpassed the Korea Composite Stock Price Index. From 5 to 28 November, the average for crypto exchanges was $9.4 billion, whereas KOSPI recorded $7 billion.

The South Korean government has acknowledged the popularity and potential of crypto in the nation’s economic trends. As such, it has provided a list of 2,500 firms and 1,000 professional investment corporations. This list does not contain financial institutions. All the financial entities listed are allowed to trade crypto from the start of the second half of the year. 

Regulatory Delays vs. Market Potential: Crypto Crossroads

More transparent Korean cryptocurrency regulations could help South Korea become a global crypto leader. Rising trading volumes and institutional interest could strengthen investor confidence and attract foreign capital. However, delays in regulation might push investors to overseas markets, reducing South Korea’s ability to benefit from crypto advancements. Over the next few years, South Korea can introduce crypto ETFs through a phased approach. Initially, strict oversight may ensure security before wider access expands. As digital assets gain mainstream acceptance, proactive policies will help South Korea remain competitive in the global financial market.