South Korea to Allow Spot Bitcoin ETFs as Part of 2026 Economic Growth Plan

South Korea is set to introduce spot Bitcoin ETFs in 2026 as part of its comprehensive Economic Growth Strategy. This initiative includes advancing digital asset legislation aimed at establishing a regulatory framework for stablecoins. Authorities are optimistic that this move will attract foreign investment and enhance South Korea's market standing.

Key Takeaways

South Korea plans to launch spot Bitcoin ETFs in 2026, marking a significant shift in its digital asset regulations.
The Financial Services Commission is working on robust legislation for stablecoins amid ongoing debates.
Regulatory changes are expected to boost foreign investment and market competitiveness.
Enforcement against anti-money laundering violations continues as the nation reforms its financial markets.

South Korea to Allow Spot Bitcoin ETFs in 2026 Growth Plan

Introduction of Spot Bitcoin ETFs

South Korea is gearing up to allow the introduction of spot Bitcoin ETFs in 2026 as a major part of its Economic Growth Plan, which the Financial Services Commission (FSC) is vigorously pursuing. This plan includes a second phase of digital asset legislation that aims to create a comprehensive regulatory structure for stablecoins.

Local reports indicate that the government is inspired by the successful spot Bitcoin ETF trading in markets like the United States and Hong Kong, which serves as a significant reference point for their domestic rollout.

Historically, there have been restrictions that forbade digital assets from being utilized as underlying assets for exchange-traded funds.

This initiative aligns with broader financial reforms intended to attract foreign investment and finally achieve South Korea's long-anticipated upgrade to the MSCI developed-market index.

According to reports from Reuters, Vice Finance Minister Lee Hyoung-il stated that the government plans to unveil a roadmap in the first half of the year for the internationalization of the South Korean won. This roadmap aims to enhance the won's accessibility and increase its demand, including offshore won financing.

Moreover, starting July 2026, the government will extend onshore foreign exchange trading to operate 24 hours a day.

South Korea Spot Bitcoin ETFs - Vice Lee Hyung image

Spot ETF Development and Stablecoin Governance Challenges

The announcement for spot Bitcoin ETFs follows a commitment from Korea Exchange Chairman Jeong Eun-bo in January to launch crypto products. Nevertheless, comprehensive digital asset legislation is currently stalled due to disputes regarding stablecoin governance involving the Financial Services Commission and the Bank of Korea.

The central bank believes that stablecoins should only be issued by bank-led consortia, requiring lenders to have at least a 51% ownership stake. Meanwhile, the FSC cautions that such strict ownership rules may disadvantage technology firms and hinder payment innovations.

There is also disagreement on whether to create a new licensing committee to oversee stablecoin issuance.

Despite these challenges, the FSC’s phase-two bill is expected to include provisions governing issuer authorization, such as capital requirements, reserve asset management to maintain at least 100% coverage of issued amounts, and guidelines related to redeemability.

The forthcoming regulatory framework will also set up cross-border stablecoin transfer regulations, as outlined in a government strategy document obtained by News1.

Additionally, authorities plan to allocate one-quarter of national treasury funds to digital currency deposit tokens by 2030, requiring revisions to the Bank of Korea Act and the National Treasury Management Act. This will establish a legal foundation for blockchain-based payments and settlements.

The ongoing regulatory uncertainty results in tension as the Korea Exchange prepares to launch new products while encountering delays that extend back several years. The FSC's June 2025 roadmap, which included plans for spot crypto ETFs, has yet to materialize.

During this time, the Democratic Party has proposed amendments to the Capital Markets Act, redefining underlying assets to incorporate Bitcoin and other digital currencies.

Increased Enforcement Amid Legislative Uncertainty

Even with ongoing legislative discussions, enforcement actions have ramped up significantly. In December, the Financial Intelligence Unit imposed a ₩27.3 billion fine on Korbit after discovering around 22,000 anti-money laundering violations.

This penalty followed previous sanctions against Upbit operator Dunamu, which faced a three-month suspension for new customer accounts in February and a ₩35.2 billion fine in November. Additionally, exchanges such as Bithumb, Coinone, and GOPAX are still under review as authorities address their respective cases.

In tandem with these enforcement actions, regulators are enhancing transaction monitoring requirements. A task force is currently evaluating whether to extend the travel rule to include crypto transfers below 1 million won. This proposed change would mandate exchanges to collect sender and recipient information for all virtual asset transfers, regardless of the transaction size.

Financial Market Reforms Aimed at MSCI Upgrade

The spot ETF initiative supports President Lee Jae-myung's policy objectives, which aim to eliminate the "Korea discount" and boost domestic market valuations. This effort contributed to the KOSPI benchmark rising by 76% in 2025, marking its most robust performance since 1999.

In June 2025, MSCI confirmed South Korea's status as an emerging market, noting that limited foreign-exchange reforms and restricted access to investment instruments remain barriers, despite recent policy changes that lifted short-selling bans and expanded trading hours for the won.

According to Bloomberg, Vice Finance Minister Lee Hyoung-il mentioned that the government anticipates a 2% economic growth this year, exceeding the Bank of Korea's estimate of 1.8%. This growth is attributed to a rise in domestic consumption and a recovery in semiconductor exports.

The government also forecasts a current account surplus of $135 billion for 2026, up from an estimated $118 billion the previous year, driven by rising chip prices and decreasing energy costs.

The outlined roadmap also emphasizes artificial intelligence, semiconductors, and advanced manufacturing as pivotal growth drivers while seeking inclusion in the FTSE World Government Bond Index and a potential MSCI developed market reclassification.