South Korea’s ruling People Power Party (PPP) is advancing a significant shift in the nation’s cryptocurrency policy by proposing the legalization of spot crypto exchange-traded funds (ETFs) and expanding institutional access to digital assets. This initiative is part of the PPP’s strategy to appeal to younger voters in the lead-up to the April 10 general election.
Embracing Spot Crypto ETFs
In early March 2025, the PPP announced plans to review international trends and necessary legal revisions to approve trading ETFs for crypto assets. Kim Sang-hoon, the PPP’s top policymaker, stated that the government and the ruling party would consider introducing ETFs tracking spot prices of cryptocurrencies.
This move aligns with global developments, particularly after the U.S. Securities and Exchange Commission approved spot Crypto ETFs in January 2024, which significantly boosted investor interest worldwide.
Expanding Institutional Access
In addition to proposing spot crypto ETFs, the PPP plans to allow 2,500 listed firms and 1,000 professional investment corporations, excluding financial institutions, to trade crypto assets starting in the second half of this year. This expansion aims to increase market liquidity and attract greater institutional participation in the crypto space.
By extending access beyond retail traders, the government hopes to establish South Korea as a more competitive and open digital asset market in the Asia-Pacific region.
Political Implications
The PPP’s proposals are widely seen as a calculated move to garner support from younger demographics, who make up a significant portion of South Korea’s crypto-investing population. More than six million South Koreans reportedly engaged with the crypto market in the first half of 2023 alone.
The opposition Democratic Party has also taken notice of crypto’s rising importance in public discourse. They have pledged to lift restrictions on domestic and international ETFs that directly hold crypto tokens, including U.S.-based spot Bitcoin ETFs. Their campaign promises include amending the Capital Markets Act to allow domestic financial investment companies to trade overseas Bitcoin spot ETFs.
Regulatory Considerations
Despite the political push, South Korea’s financial regulators have maintained a cautious stance on introducing ETFs for virtual assets, citing systemic risks and market volatility. In January 2024, the Financial Services Commission (FSC) reaffirmed its position that financial institutions should not be allowed to launch cryptocurrency ETFs.
However, regulatory winds may be shifting. The FSC recently announced it would reevaluate the current ban on local spot cryptocurrency ETFs and consider allowing institutional accounts on domestic crypto exchanges. A new cryptocurrency committee within the FSC is set to review existing policies and recommend possible reforms.
Asia Gains Entrance To the Crypto Space
The PPP’s support for legalizing spot crypto ETFs and opening up institutional access marks a turning point in South Korea’s digital asset strategy. Whether these promises translate into actual legislative and regulatory changes remains to be seen, but one thing is clear: crypto is becoming a central issue in South Korea’s political landscape.
As the April election approaches, both major parties are recognizing the power of the crypto vote — and are adjusting their platforms accordingly. The outcome could significantly shape the future of digital finance in one of Asia’s most tech-savvy nations.