SPOT BITCOIN ETFS COMING TO SOUTH KOREA IN 2026: GROWTH PLAN ANNOUNCED
South Korea plans to introduce spot Bitcoin ETFs in 2026 as part of its Economic Growth Strategy, while the Financial Services Commission (FSC) fast-tracks phase-two legislation to establish a comprehensive stablecoin regulatory framework amid ongoing disputes with the Bank of Korea.
The government cited active spot Bitcoin ETF trading in markets such as the United States and Hong Kong as a key reference for allowing domestic products. Regulators previously banned digital assets as underlying assets for ETFs.
This initiative is part of reforms to attract foreign investment and help South Korea reach MSCI developed-market status.
According to Reuters, Vice Finance Minister Lee Hyoung-il stated that authorities will “prepare in the first half of the year a roadmap for the internationalization of the won to improve its accessibility and increase demand, including offshore won financing.”
Additionally, the government plans to extend onshore foreign exchange trading to 24-hour operations starting July 2026, further aligning the country’s financial markets with global standards.
Spot ETF Push Collides with Stalled Stablecoin Framework
South Korea’s push to introduce spot Bitcoin ETFs follows Korea Exchange Chairman Jeong Eun-bo’s January pledge to launch crypto products. However, broader digital asset legislation remains gridlocked due to ongoing stablecoin governance disputes between the Financial Services Commission (FSC) and the Bank of Korea (BOK).
The central bank insists stablecoins should be issued only by bank-led consortia with lenders holding at least 51% ownership, while the FSC argues that such fixed thresholds could sideline technology firms and slow innovation in payments. Regulators also disagree on whether a new licensing committee is needed for stablecoin oversight.
Despite the impasse, the FSC’s phase-two bill is expected to include:
- Issuer authorization with capital requirements
- Reserve asset management, ensuring at least 100% coverage of issued stablecoins
- Redeemability guarantees
Cross-border stablecoin transfer regulations
Separately, the government plans to allocate 25% of national treasury funds to digital currency deposit tokens by 2030, requiring amendments to the Bank of Korea Act and National Treasury Management Act to provide a legal basis for blockchain-based payments and settlements.
Enforcement Actions Intensify Amid Policy Uncertainty
Regulatory enforcement has accelerated even as legislation remains in debate. In late December, the Financial Intelligence Unit fined Korbit ₩27.3 billion for approximately 22,000 anti-money laundering violations.
Earlier sanctions included:
Upbit operator Dunamu: three-month suspension on new accounts in February and a ₩35.2 billion fine in November
Bithumb, Coinone, and GOPAX: under ongoing review
Authorities are also expanding transaction monitoring requirements, potentially extending the travel rule to crypto transfers below ₩1 million, requiring exchanges to collect sender and recipient information for all virtual asset transfers.
Broader Market Reforms Target MSCI Upgrade
The spot ETF initiative aligns with President Lee Jae-myung’s efforts to remove the “Korea discount” and boost domestic market valuations. The KOSPI benchmark rose 76% in 2025, its strongest performance since 1999.
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MSCI maintained South Korea’s emerging market status in June 2025, citing limited foreign exchange reforms and restricted investment instruments as obstacles, despite recent measures such as lifted short-selling bans and extended won trading hours.
Vice Finance Minister Lee Hyoung-il told reporters the government expects 2% economic growth in 2026, above the Bank of Korea’s 1.8% forecast, driven by stronger domestic consumption and semiconductor-led exports.
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The government also forecasts a current account surplus of $135 billion, up from $118 billion in 2025, as energy costs ease and chip prices recover. The roadmap positions artificial intelligence, semiconductors, and advanced manufacturing as key growth drivers while pursuing inclusion in the FTSE World Government Bond Index and eventual MSCI developed market reclassification.
