South Korea’s Exchange Chairman, Eun-Bo Jeong, has signaled interest in introducing crypto-based exchange-traded funds (ETFs) this year, aligning with global demands for such products.
At the Securities and Derivatives Market Opening Ceremony on Jan. 2, Jeong reportedly emphasized the need for innovative financial products to revitalize the country’s capital markets.
Jeong highlighted the economic hurdles faced in the past year, citing challenges such as a contracting domestic economy, reduced export growth, and geopolitical tensions.
He explained that these factors have left South Korea’s financial markets lagging behind their global counterparts. Inspired by the successful international launch of Bitcoin-related financial products, the exchange plans to explore new avenues, including crypto-related ETFs, to address these issues.
This announcement marks a potential shift from South Korea’s previous stance. Last year, the Financial Supervisory Service (FSS) restricted asset managers from offering ETFs tied to crypto-related firms like Coinbase.
However, the potential for crypto ETFs remains uncertain due to regulatory hurdles. Ki Young Ju, CEO of CryptoQuant, has raised concerns about the country’s readiness to approve such products.
Ju likened South Korea’s cautious regulatory stance to the Gary Gensler-led US Securities and Exchange Commission (SEC), where resistance to crypto ETFs had delayed their adoption for over a decade until 2024.
Bitcoin ETFs success
Meanwhile, global crypto ETFs’ growing success might influence South Korea’s interest in these products.
Bitcoin ETFs made a strong debut in the United States by attracting substantial investments within their first year of trading. Per SoSoValue data, the 12 ETF products have amassed more than $35 billion in inflows and demonstrated increasing acceptance among institutional investors.
Moreover, market experts anticipate further innovation in the ETF landscape this year, given the more favorable regulatory regime led by the Donald Trump administration.
Considering this, Nate Geraci, president of the ETF Store, has predicted that the market could witness the launch of combined Bitcoin and Ethereum ETFs, staking options for the ETH funds, and broader diversification with assets like Solana entering the ETF space.
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