What happened?
A South Korean lawmaker introduced a bill to amend the Capital Markets Act, aiming to expand the underlying assets for ETFs to include digital assets like Bitcoin. The amendment sets up a legal framework that allows trust companies to hold and manage digital assets as trust property. This move is a part of a broader agenda to integrate digital assets into South Korea’s financial system.
Who does this affect?
The proposed bill primarily affects asset managers, investors, and trust companies in South Korea who are interested in digital assets. Institutional investors with more than KRW 10 billion in assets may gain the ability to trade virtual assets domestically by late 2025. Additionally, it impacts regulators and industry players focused on risk management related to digital asset derivatives.
Why does this matter?
This amendment, if passed, could significantly impact South Korea’s market by offering a regulated path for digital asset-based ETFs, increasing market transparency and diversity. It provides investor protections previously unavailable due to the prohibition on ETFs using digital assets as underlying assets. This change might also influence broader debates about digital asset regulation, including taxation and reporting standards, potentially positioning South Korea as a leader in digital finance integration.