South Korea plans to limit crypto holdings by companies and professionals to 5% of equity, directing most institutional flows to the top 20 coins, while it finalizes ETF and stablecoin rules.
Summary
- FSC Draft guidelines would allow companies to buy only the top 20 coins by market capitalization, while debate continues over whether dollar stablecoins like USDT should be included.
- The final rules, expected by February, will add price limits and split trading to curb volatility as institutions move in, likely concentrating liquidity in Bitcoin and possibly Ethereum.
- The upcoming Digital Asset Basic Act will establish rules for won stablecoin and open the door to South Korea’s first crypto ETFs, which are considered crucial to the local market structure.
According to reports, South Korea’s Financial Services Commission plans to limit cryptocurrency holdings of companies and professional investors to 5% of share capital annually.
According to the draft guidelines, companies would be allowed to invest in the top 20 cryptocurrencies based on market capitalization. The inclusion of US dollar-pegged stablecoins such as USDT continues, according to the reports.
South Korea expects to offer a 5% crypto cap for businesses
Final rules are expected between January and February, with corporate trading expected later this year, the reports said. The proposed framework will also establish price limits and split trading rules, intended to reduce volatility as corporate participation increases.
The limit will likely improve liquidity, but will concentrate flows in Bitcoin (BTC) and possibly Ethereum, with limited impact on smaller altcoins, according to analysts. The 5% limit may not pose a significant restriction as most companies are unlikely to exceed it in the early stages, observers noted.
Market participants are monitoring the country’s upcoming Digital Asset Basic Act, expected in the first quarter. According to reports, the legislation will formalize regulations for won-pegged stablecoins and introduce the country’s first crypto exchange-traded funds.
Stablecoin regulations are seen as particularly influential for South Korea’s broader crypto ecosystem, market observers said.
The FSC’s moves reflect a cautious approach to expanding access to institutional cryptocurrencies while ensuring market stability amid growing corporate interest, analysts said.
