South Korea Signals Spot Bitcoin ETF Approval With New Digital Asset Law

South Korea is planning to launch domestic spot digital asset exchange-traded funds this year, as part of the 2026 Economic Growth Strategy, which reveals a change in the regulator’s attitude toward virtual assets in traditional markets.

Authorities acknowledged that spot Bitcoin ETFs are already actively traded in jurisdictions such as the United States and Hong Kong. Those markets served as key reference points for the local decision. Until now, digital assets have not been recognized as eligible ETF underlying assets – a fact that has barred the way for spot products. That barrier is set to be removed as part of a broader financial modernization effort.

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Second Phase Digital Asset Law Takes Shape

In addition to the ETF plans, the Financial Services Commission will expedite the second phase of digital asset legislation. The upcoming Digital Assets Act will institute a discipline system for stablecoins, core elements of which include an issuer approval system with capital requirements, strict management of reserve assets, and establishment of clear rights to claims for redemption on the part of holders.

It will require issuers to hold reserves in excess of the total amount outstanding of stablecoins in circulation. The government also intends to take steps regarding cross-border transactions in stablecoins. New oversight measures will be put in place with regard to overseas transfers and settlement flows, taken in concert with the relevant ministries. This will provide a safeguard against financial risks, while facilitating responsible innovation.

Deposit Tokens and Blockchain Payments Expand

Deposit tokens and blockchain payments are expanding beyond private digital assets; the plan also outlines how to promote the use of state-backed digital currencies. The administration aims to introduce deposit tokens linked to a part of the national treasury by 2030. Deposit tokens are blockchain versions of bank deposits, rather than standalone cryptocurrencies.

Authorities plan to revise the Bank of Korea Act and the National Bank Management Act within this year, based on the results from the pilot programs. The revision will legally establish a foundation for blockchain-based payment and settlement. E-wallets will also be provided to facilitate making token-based payments for business promotion expenses.

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