South Korea forms virtual asset committee for Bitcoin ETF review
South Korea’s Financial Services Commission (FSC) has established a virtual asset committee to assess the approval of spot Bitcoin (CRYPTO:BTC) exchange-traded funds (ETFs), signaling a potential shift in the country’s stance on digital asset investment products.
According to local reports, the FSC’s decision could place South Korea alongside other nations considering spot Bitcoin ETFs, which have gained popularity in markets like the U.S.
During a recent National Assembly audit, the FSC revealed that the newly formed committee would focus on evaluating policies surrounding digital assets.
The committee will consult with experts and stakeholders before any possible approval of spot Bitcoin ETFs.
If approved, the decision could lead to significant growth in South Korea’s digital asset market.
Despite growing interest, experts, including the Korea Institute of Finance (KIF), have raised concerns about introducing such financial instruments.
In a June report, the KIF warned of potential risks, stating, "Allowing [such] products can lead to side effects such as increased inefficiency in resource allocation, increased exposure to crypto-related risks in the financial market, and weakened financial stability."
The report further highlighted the possibility of financial instability due to the volatile nature of cryptocurrency markets.
According to CryptoQuant CEO Ki Young Ju, the approval of spot Bitcoin ETFs could also help mitigate the Kimchi premium, a price discrepancy between South Korean and international exchanges.
"This is bullish and will mitigate the Kimchi premium as arbitrage funds and market makers enter the Korean market," said Young Ju.
As institutional interest in crypto ETFs continues to grow globally, South Korea faces a pivotal moment.
Other jurisdictions, such as Australia and Hong Kong, have also begun embracing crypto-related products, making South Korea’s deliberation on spot Bitcoin ETFs critical to its future in the digital asset space.
At the time of writing, the Bitcoin price was $59,697.78.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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