Top South Korean presidential candidates support legalizing Bitcoin ETFs, signaling growing political backing for regulated crypto investment options.
Although the three front-runners for president have expressed support for Bitcoin ETFs, prior political pledges have not yet been fulfilled in South Korea.
With the country’s leading presidential candidates voicing pro-crypto views, South Korea may soon follow Hong Kong in allowing spot Bitcoin exchange-traded funds (ETFs).
However, some industry watchers are still wary of the possibility of immediate regulatory change.
Ki Young Ju, the founder and CEO of on-chain data platform CryptoQuant, claimed in an X post on May 14 that all three top South Korean presidential contenders favor institutional investment and Bitcoin ETFs.
Since institutional cryptocurrency investments and Bitcoin ETFs are now prohibited in South Korea, Ju continued, “100% [of the] volume comes from retail.”
According to a report from The Korean Economic Daily (KED), Lee Jae-myung, the head of the Democratic Party of South Korea, pledged on May 6 to legalize spot cryptocurrency exchange-traded funds (ETFs), reduce transaction fees, and “create a safe investment environment so that young people can [build] assets and plan for the future.”
Similar pledges, including the legalization of spot cryptocurrency ETFs, were made by the Democratic Party during the 2024 election campaign. However, KED noted that developments have lagged.
South Korean candidates support ETFs, but history raises questions.
Although the major contenders’ pro-crypto stances point to a bright future for South Korean laws about digital assets, regulatory experts are not convinced.
The candidates’ pro-crypto stance indicates a possible change that promises to work toward the legalization of spot Bitcoin ETFs and cost reductions. However, history dampens hope. Author and intergovernmental blockchain advisor Anndy Lian added:
“They will take on similar stances as Hong Kong. Whether the ETFs can perform or not depends on various other factors.”
Lian added that the Financial Services Commission’s tone also signaled “regulatory openness” for cryptocurrencies. “A pro-crypto president could drive reform, aligning South Korea with global trends like the US, where Bitcoin ETFs have attracted over billions in net inflows,” Lian said.
However, Lian noted that the People Power Party, which was elected in 2022, also pledged to amend the contentious one-exchange-one-bank regulation and eliminate the ban on cryptocurrency ETFs “but failed to act before President Yoon’s impeachment.”
The first group of ETFs based on Bitcoin and Ether went live in Hong Kong on April 30, 2024, but trading activity was not as intense as in the US.
