South Korean regulators could follow their Japanese counterparts should the latter grant approval to Bitcoin ETF applications, a new report has claimed.
Per the South Korean newspaper Maeil Kyungjae , Seoul-based regulators are keeping a close eye on developments in Tokyo before making a decision on crypto spot exchange-traded funds.
South Korean Bitcoin ETF Approval Drawing Closer?
The Financial Services Commission (FSC) has been discussing Bitcoin ETF approval since late last year.
However, the body has repeatedly expressed a lukewarm attitude to crypto, and Bitcoin ETFs in particular.
The headquarters of the South Korean Financial Supervisory Service. (Source: Financial Supervisory Service/YouTube/Screenshot)
The newspaper wrote that Tokyo has also “previously taken a tepid stance on crypto,” but has recently “taken steps” to approve Bitcoin ETFs.
As such, South Korean financial authorities have “also begun to respond.”
The Financial Supervisory Service, another top South Korean regulator, has reviewed the Japanese Financial Services Agency (FSA)’s crypto policy and has “shared its findings with relevant organizations” in Seoul, the media outlet reported.
Major Japanese media outlets like Nihon Keizai Shimbun (aka Nikkei) has reported that the FSA is considering reclassifying crypto as an investment tool.
Nihon Keizai Shimbun added that the FSA is also “considering” granting Bitcoin and altcoin ETF approvals.
FSA Moving Fast?
The South Korean regulators think that the FSA’s silence on this matter lends credibility to the Nihon Keizai Shimbun report.
The FSA wants to roll out a raft of crypto-related regulatory changes before the end of June.
The Japanese government plan will then likely approve these measures before new legislation rolls out in the second half of 2025 or early 2026. Maeil Kyingjae wrote:
“If Japan speeds up the introduction of Bitcoin ETFs in this manner, it will be interesting to see how the South Korean government responds.”
Lawmakers in the South Korean National Assembly.
The FSC, some feel, is acting with caution due to the ongoing power vacuum in Seoul. President Yoon Seok-yeol remains at the center of a drawn-out impeachment case.
Lawmakers Not Focusing on Crypto For Time Being
In response, members of the National Assembly have stated that they have paused all work on crypto legislation until the “impeachment crisis” is resolved.
This has effectively left the FSC and the Financial Supervisory Service to fend for themselves on crypto-related policy.
The Democratic Party – the largest party in the National Assembly – last year pledged to allow citizens the right to invest in Bitcoin ETFs.
Prior to his election in 2022, Yoon also made a number of crypto-related manifesto pledges. However, his government failed to deliver on many of these.
A Bullish Stance?
While Seoul is usually more predisposed to follow Washington’s lead on financial policy, some South Korean regulators were concerned that the US decision to approve Bitcoin ETFs in 2024 may have been overly bullish.
This approach has angered many South Korean financial chiefs, who claim that the FSC is allowing rival nations to steal a march on Seoul.
Maeil Kyungjae pointed out that the FSC has recently announced that it would “not approve virtual asset ETFs in the near future, citing Japan’s stance as the main reason.”
Kim So-young, the FSC Vice Chairman and the head of the advisory Virtual Asset Committee, said last month:
“I have continued to say that I would carefully review [Bitcoin spot ETF approval]. Several countries have not yet approved them. Examples include the United Kingdom and Japan.”
The FSA, meanwhile, is also thought to be working on further crypto reforms. These include possible changes to the disclosure laws governing the financial information of crypto firms, and a law requiring all crypto investment advisors to sign up to a national registry.
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