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South Korea is under pressure to embrace cryptocurrency ETFs after moves by the United States and Hong Kong
The SEC’s sudden approval of Ethereum ETFs has sparked competition across global financial markets, particularly regarding regulatory positions on digital assets. Enthusiasm grew as Hong Kong welcomed ETFs, keeping the financial scene vibrant.
Meanwhile, South Korea, a major player in the world of cryptocurrencies, is debating whether to approve these financial instruments.
Here’s a deeper dive into this exciting update.
South Korea under pressure: will they follow the SEC’s example?
Local reports reveal that Korean regulators are feeling pressure to approve cryptocurrency ETFs following the US SEC’s approval of Ethereum spot ETFs. This SEC decision could influence financial authorities in Seoul to reevaluate their cautious approach towards digital assets. However, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) remain reluctant to allow cryptocurrency trading in the mainstream securities market.
A tale of two markets: United States versus South Korea
Unlike the United States, which approved Bitcoin ETFs in January 2024 and Ethereum ETFs in May 2024, South Korean regulators have been cautious about incorporating digital assets into their traditional financial systems. The FSC insists that ETFs must comply with the Capital Markets Act, limiting them to conventional assets. They argue that including digital assets could disrupt the financial system.
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Critics say South Korea’s regulations are outdated and fail to recognize the growing importance of digital assets in modern finance. Xangle, a major provider of digital currency data in Seoul, has criticized the ban on digital assets in traditional securities markets. They support regulatory reforms to keep pace with global trends.
Global pressure increases: Korea at a crossroads
Global acceptance of ETH ETFs, bolstered by Hong Kong’s approval, has increased pressure on Korean regulators to reconsider their stance on digital assets. Jung Eui-jung, head of the Korean Shareholders’ Alliance, emphasizes the need for Korea to follow the example of the United States in approving Bitcoin and Ethereum ETFs. He warns that not doing so could push investors to move their funds to US markets, potentially weakening Korea’s position on the global financial scene.
Restricting cryptocurrencies could push local investors into the US market, negatively impacting Korea’s financial health. A balanced approach is essential to promote innovation and attract capital inflows.
Is Korea right to be cautious about cryptocurrency ETFs or should it embrace the global trend? Share your thoughts.