South Korea is positioning to permit spot Bitcoin exchange-traded funds in 2026, a clear pivot from its earlier cautious stance on crypto. The direction is anchored in the government’s 2026 Economic Growth Strategy and is designed to bring institutional demand back onshore while aligning with international ETF momentum.
The approach is being staged rather than rushed. Regulators began foundational work in 2025 and are lining up legal amendments and market-plumbing upgrades to support launches later in 2026, with an explicit aim to “attract more global investors and retain capital within the country” after offshore outflows recorded in 2025. The policy intent is to reduce leakage of capital and re-center liquidity inside the domestic regulatory perimeter.
Legal and regulatory pathway to spot ETFs
The core enabler is legislative. Amendments to the Capital Markets Act are intended to explicitly allow domestic financial institutions to create and list spot crypto ETFs by recognizing cryptocurrencies as eligible underlying assets. This is the structural switch that converts a policy ambition into a listing-capable product framework.
In parallel, the government is advancing a Digital Asset Act that is expected to be substantially enacted in early 2026, with stablecoin rules under that framework slated for finalization in the first quarter of 2026. That sequencing suggests stablecoin guardrails are being treated as a prerequisite layer before broader product expansion.
Those stablecoin provisions are described as strict: an issuer licensing regime, a 100% reserve requirement, and guaranteed redemption rights. Regulators are presenting these controls as necessary to strengthen investor protection and to justify more complex instruments such as spot Bitcoin ETFs, with the immediate plan emphasizing spot products rather than futures-based alternatives. The message is that stronger reserve and redemption standards are part of the credibility stack for approving spot ETFs.
South Korea is also pairing the ETF push with a wider digital-asset agenda. The strategy allocates roughly 25% of the 2030 budget—reported as about $499 billion—toward digital-asset-related initiatives such as blockchain adoption and central bank digital currency planning, while also exploring digitized treasury operations that target executing a quarter of treasury funds via government-issued deposit tokens by 2030. This ties ETF policy to a broader modernization roadmap that spans payments, market structure, and public finance infrastructure.
Supervision, reporting, and market infrastructure readiness
On the enforcement and reporting side, the plan includes adopting the OECD Crypto-Asset Reporting Framework and sharing crypto transaction data with 48 countries starting in 2026, alongside expanded powers to freeze accounts suspected of manipulation and tighter surveillance to close loopholes. Crypto firms would also become eligible for venture business certification—unlocking tax breaks and funding channels—while the Financial Services Commission leads implementation and the Korea Exchange has stated it is ready to support listing and trading. The operating model is “access with controls,” combining product availability with heavier monitoring and data-sharing.
The market’s near-term focus will be on execution milestones: enactment of the Digital Asset Act, final stablecoin rules in Q1 2026, and the operational rulebook that will govern custody, reserve standards, and surveillance for spot ETF launches later in 2026. If those implementation details land cleanly, the ETF rollout could meaningfully reshape local liquidity and custody flows—if they don’t, the timeline risks slipping even if the policy direction holds.
