South Korean Exchange Chairman Eun-Bo Jeong has indicated his interest in introducing crypto-based exchange-traded funds (ETFs) this year, in line with global demand for such products.
At the opening ceremony of the securities and derivatives market on January 2, Jeong said reportedly stressed the need for innovative financial products to revive the country’s capital markets.
Jeong highlighted the economic hurdles faced in the past year, citing challenges such as a shrinking domestic economy, reduced export growth and geopolitical tensions.
He explained that these factors have caused South Korea’s financial markets to lag 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 possible shift from South Korea’s previous position. Last year, the Financial Supervisory Service (FSS) banned asset managers from offering ETFs linked to crypto-related companies such as Coinbase.
However, the potential for crypto ETFs remains uncertain due to regulatory hurdles. Ki Young Ju, CEO of CryptoQuant, has expressed concern about the country’s willingness to approve such products.
Ju compared 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 by more than a decade to 2024.
Success of Bitcoin ETFs
Meanwhile, the growing success of global crypto ETFs could influence South Korea’s interest in these products.
Bitcoin ETFs made a strong debut in the United States by attracting significant investment in their first year of trading. According to data from SoSoValue, the twelve ETF products have generated inflows of more than $35 billion and have shown increasing adoption among institutional investors.
Furthermore, market experts expect 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, did predicted that the market could witness the launch of combined Bitcoin and Ethereum ETFs, option deployments on the ETH funds, and broader diversification with assets like Solana entering the ETF space.
