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The Korea Exchange (KOSDAQ), a South Korean stock market, has announced that it is “exploring” the possibility of approving crypto spot ETFs in 2025.
According to the South Korean news outlet The Truth, this information was shared by KOSDAQ Chairman Jeong Eun-bo during the 2025 Securities and Derivatives Market Opening Ceremony.
Financial Services Commission (FSC) Chairman Kim Byung-hwan was also present. Kim informed an audience at the Korea Exchange in Yeouido, Seoul, that the regulatory body aims to allow companies to initiate security token offerings (STOs) in 2025.
Prices on the Korea Exchange’s KOSPI index of common stocks over the last year. (Source: Google Finance)
Is the South Korean Stock Exchange Showing Interest in Crypto?
The two officials spoke following a tumultuous conclusion to 2024 in South Korea. President Yoon Suk-yeol’s failed attempt to declare martial law in early December 2024 caused significant disruption in the already sluggish KOSDAQ.
This situation prompted many domestic and international investors to liquidate their holdings amid discussions of a stock market exodus. Kim stated:
“Let’s make 2025 the year when the foreign and domestic investors who left the market return.”
The Financial Services Commission Chairman Kim Byung-hwan addressing reporters in 2024. (Source: YTN/YouTube)
Jeong noted that the stock market needs to explore new business opportunities, including “crypto exchange-traded funds (ETFs).”
“We will benchmark overseas cases for new business avenues such as crypto ETFs and explore new territory in the capital market.”
Korea Exchange Chairman Jeong Eun-bo
South Korea significantly lowered its economic growth forecasts for this year as it copes with the repercussions of impeached President Yoon Suk Yeol’s martial law incident https://t.co/n4eBzlz7EZ
— Bloomberg Markets (@markets) January 2, 2025
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STO Prospects
Meanwhile, Kim provided a timely boost for South Korean companies that have been awaiting the green light to issue security tokens for several years.
Yoon had pledged to prioritize regulatory changes for STOs in his election platform. However, he has since failed to deliver.
Tensions are rising as the CIO moves to detain President Yoon Suk Yeol. Protests and legal battles intensify surrounding this historic arrest. https://t.co/3JlQTN1AZQ#SouthKorea #Politics #YoonSukYeol #CIO
— The Korea Herald 코리아헤럴드 (@TheKoreaHerald) January 2, 2025
Traditional financial institutions and tech firms are eager to launch STOs. Many have already established STO platforms in anticipation of forthcoming approval.
However, they have encountered frustration as Yoon’s administration faced challenges due to a poor performance in last year’s midterm elections and corruption allegations.
The FSC appears ready to take the lead, with lawmakers “pausing” discussions on crypto regulations until the political unrest subsides.
“We will institutionalize STOs […] to diversify the securities issuance and distribution system. […] We will reorganize the entire system. This will enable comprehensive financial investment companies to fulfill their original role of providing corporate finance and venture capital.”
Financial Services Commission Chairman Kim Byung-hwan
“Last year, our capital market faced significant challenges. The growth potential of our companies diminished due to the contraction of the domestic economy and a slowdown in exports. The market exhibited particularly sluggishness compared to major countries due to global conflicts and domestic political events.”
Korea Exchange Chairman Jeong Eun-bo
The FSC chief called on lawmakers, the ruling People’s Power Party, and corporate stock market investors to collaborate towards a common goal. He urged:
“Although we are starting this year under difficult circumstances, the government, the National Assembly, and corporate investors should all work together. United, we can make 2025 the year when both foreign and South Korean investors who have exited our market return.”
Late last year, Jeong stated that it was time for regulators to eliminate barriers to adoption and advocated for South Korea to “institutionalize” crypto.
The post South Korean Stock Exchange ‘Exploring’ Crypto Spot ETF Approvals appeared first on Cryptonews.
