South Korea persists in its stance against allowing financial institutions to invest in digital currencies, effectively blocking the launch of any crypto exchange-traded fund (ETF) within its borders. A representative from the Financial Services Commission (FSC) clarified to local journalists that this policy will remain in effect. Concurrently, bitcoin’s value in South Korea is experiencing a notable premium of more than $1,500 above the global rate.
Amidst Country’s Bitcoin Premium Surge, South Korea Maintains Crypto ETF Ban
Following the U.S. Securities and Exchange Commission’s (SEC) authorization of 11 spot bitcoin ETFs, an FSC official in South Korea reiterated the country’s firm position on barring financial institutions from crypto investments. Emphasizing stability and investor protection, the South Korean official underscored that “the government has consistently maintained the principle of prohibiting financial institutions from investing in virtual assets for the stability of the financial market and protection of investors.”
The FSC representative further stated:
There’s no situation warranting a change in government policy, and it has not been reviewed.
On Thursday, Jan. 11, 2024, bitcoin’s trading value in South Korea notably exceeded the global average. During the time when BTC surpassed the $48K mark at 9:39 a.m. Eastern Time (ET), it was trading on Upbit for an impressive $49,545 per unit. This elevated price trend was mirrored on Bithumb, with values approaching the $50K threshold. Upbit reported a substantial $7 billion in global trade volume over 24 hours, while Bithumb recorded $2.9 billion in trades. On this day, a significant 8.74% of all bitcoin (BTC) transactions globally were conducted in Korean won.
Despite South Korean financial regulators’ opposition to these premium rates on exchanges, the trend continues unabated. Regarding the recent U.S. ETF approvals, South Korea’s government’s official position was solidified in December 2017. During a vice-ministerial meeting with relevant ministries, the government announced emergency measures concerning crypto assets. These measures included prohibiting financial institutions from holding, buying, accepting as collateral, or making equity investments in digital currencies.
“The U.S. previously allowed futures ETFs, and some countries like Hong Kong, Germany, and Canada are already operating spot ETFs,” the South Korean FSC official said on Thursday. “The SEC’s recent decision to selectively approve spot ETFs is not a new event significant enough to change the domestic market.”
What do you think about South Korea’s stance against financial companies holding virtual assets? Share your thoughts and opinions about this subject in the comments section below.
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