On Thursday, the chairman of the South Korea Stock Exchange, Jeong Eun-bo, revealed their plan to “test” the approval of crypto-based exchange-traded funds (ETFs) to continue the “value-up process” and face the ongoing market. challenges.
Korea Exchange To Test Crypto ETFs
On January 2, Jeong Eun-bo announced the Korea Exchange’s plan to test crypto-based ETFs this year at the opening ceremony of the 2025 Securities and Derivatives Market. The Chairman said that South Korea’s financial markets have faced major challenges in 2024, which has weakened the growth potential of domestic companies.
Jeong also noted that global conflicts and domestic political developments make the market “more comfortable compared to major countries.” The South Korean market will continue to face risks in the new year as “domestic and international economic conditions are not favorable.”
Nevertheless, the Chairman explained that the exchange will continue to develop its plan to raise prices in order to “partner with more leading companies and establish a management culture focused on shareholder value.”
In addition, Jeong revealed that the Korea Exchange will “mark international cases of new business methods such as crypto ETFs and explore a new area in the capital market.”
It is worth noting that crypto ETFs have been banned in South Korea since 2017. The country’s regulator, the Financial Services Commission (FSC), reaffirmed its position after the US Securities and Exchange Commission (SEC) approved crypto-based investment products last year.
However, the financial watchdog announced in October that a newly formed advisory group to discuss digital asset policies would review the ban, marking an apparent departure from strict regulation. This change seems to be influenced by the success of Bitcoin and Ethereum ETFs, which exceeded the expectations of many experts in their first year.
South Korea’s Political Crisis Is Setting New Rules
A Korea Exchange official previously called for crypto to be imported into the country to “create added value.” Jeong said lawmakers and financial institutions should look at digital assets differently, saying the industry has grown and become more influential in recent years.
The Chairman added that South Korea should consider including digital assets in institutional finance, as the market needs to be updated to compete with other countries.
The current position of the regulator in digital assets has made the market unable to overcome the different regulatory limits of the age, challenging the development of the market and competition. However, crypto-related regulations will be suspended until political issues are resolved, which could take several months.
In December, South Korean President Yoon Suk Yeol declared the first emergency martial law in four decades. Yoon accused the country’s opposition Democratic Alliance, which has a majority in the National Assembly, of sympathizing with North Korea and anti-state activities.
The National Assembly voted to overturn the President’s proclamation and effectively ended the emergency martial law within six hours. Since then, the Council has ousted Yoon and Prime Minister Han Duck-soo, who became acting president after Yoon’s power was suspended.
According to Associated Press reports, South Korea’s presidential security service prevented authorities from arresting Yoon today during a six-hour standoff at the President’s residence.
As a result, the anti-corruption agency plans to “forcefully demand” that the current acting leader, Deputy Prime Minister Choi Sang-mok, order the service to comply with the issuance of the arrest warrant.
The Constitutional Court will decide whether to remove Yoon from office or reinstate him. To acquit him, at least six justices on the nine-member court must vote in favor.
Total crypto market capitalization is at $3.41 trillion in the one-week chart. Source: TOTAL on TradingView
Featured image from Unsplash.com, Chart from TradingView.com