Top South Korean presidential hopefuls support legalizing Bitcoin ETFs
South Korea could soon follow Hong Kong in legalizing spot Bitcoin exchange-traded funds (ETFs), as the country’s top presidential candidates have expressed pro-crypto positions.
Still, some industry observers remain cautious about the likelihood of near-term regulatory change.
“All three major South Korean presidential candidates support #Bitcoin ETFs and institutional investment,” Ki Young Ju, the founder and CEO of onchain data platform CryptoQuant, wrote in a May 14 X post.
Currently, Bitcoin ETFs and institutional crypto investments are banned in South Korea, meaning that “100% [of the] volume comes from retail,” Ju added.
Related: Bitcoin more of a ‘diversifier’ than safe-haven asset: Report
On May 6, South Korea’s Democratic Party leader Lee Jae-myung promised to legalize spot crypto ETFs, lower transaction fees and “create a safe investment environment so that young people can [build] assets and plan for the future, according to a report from The Korean Economic Daily (KED).
The Democratic Party made similar promises in its 2024 election campaign, including the legalization of spot crypto ETFs, but progress has been delayed, KED reported.
Related: SEC delays Solana ETF as decisions for Polkadot, XRP loom
Candidates back ETFs, but history casts doubt
While the crypto-friendly perspectives of the leading candidates suggest a promising future for digital asset legislation in South Korea, regulation experts remain skeptical.
“The candidates’ pro-crypto pledges to push to legalize spot Bitcoin ETFs and reduce fees signal a potential shift. But history tempers optimism,” Anndy Lian, author and intergovernmental blockchain adviser, told Cointelegraph, adding:
“They will take on similar stances as Hong Kong. Whether the ETFs can perform or not depends on various other factors.”
“A pro-crypto president could drive reform, aligning South Korea with global trends like the US, where Bitcoin ETFs have attracted over billions in net inflows,” Lian said, adding that the Financial Services Commission’s tone also suggested “regulatory openness” for cryptocurrencies.
However, the People Power Party, elected in 2022, also promised to lift the crypto ETF ban and revise the controversial one-exchange-one-bank rule, “but failed to act before President Yoon’s impeachment,” Lian said.
Over in Hong Kong, the first batch of Bitcoin and Ether-based ETFs launched for trading on April 30, 2024, but saw disappointing trading activity compared to their US counterparts, Cointelegraph reported.
Magazine: Altcoin season to hit in Q2? Mantra’s plan to win trust: Hodler’s Digest, April 13 – 19