South Korea inches closer to Bitcoin ETF decision, looks to Japan as example

South Korea is growing closer to a decision on Bitcoin (BTC) exchange-traded funds (ETFs), according to a report from local publication Maeil Business Newspaper (MK).

In its report, MK says the South Korean government is looking to Japan as an example, as the island nation has been skeptical of digital assets in the past but may be changing its tone.

The Financial Supervisory Service, South Korea’s financial regulator, reportedly examined the Japan Financial Services Agency’s legislative trend toward digital assets and shared it with related institutions in South Korea.

Nikkei, a Japanese publication, reported on Feb. 10 that Japan’s Financial Services Agency was considering positioning crypto as financial products alongside securities, and might lift the ban on crypto ETFs in the country.

The discussion in Japan is expected to last through the first half of 2025 before a legislative plan is drafted and submitted to the National Assembly in 2026.

Related: South Korea’s strict laws on crypto exchanges come into force

Kim So-young, vice chairman of South Korea’s Financial Services Commission, reportedly said in a press conference after the virtual asset committee: “I have continued to say that I would carefully review (spot Bitcoin ETFs), and it is similar in the broader context. There are countries that have not yet introduced it. There are England and Japan.”

South Korea continues crypto regulation amid political struggles

South Korea, where over 30% of citizens invest in crypto assets, has seen political struggles after former president Yoon Suk Yeol was arrested on Jan. 15 following an attempt to impose martial law in the country.

Since then, the South Korean government has continued its crypto regulation efforts. On Feb. 13, the Financial Services Commission announced that charities and universities would be able to sell crypto donations starting in the second half of 2025.

The government has continued with enforcement actions as well. On Jan. 16, Upbit, one of the largest cryptocurrency exchanges in the country, received a suspension notice for alleged Know Your Customer violations. Upbit reportedly filed a lawsuit against South Korea’s Financial Intelligence Unit to overturn the business sanctions.

Related: South Korea’s Democratic Party pushes to implement 20% crypto tax in 2025