South Korea Opens Doors to Corporate Crypto Investments After Long Ban

Major Shift in Crypto Regulations

After a nine-year ban, South Korea is allowing corporations and professional investors to allocate up to 5% of their capital to digital assets. The Financial Services Commission (FSC) has lifted restrictions that have kept institutions out of the crypto market since 2017.

Key Points of the New Rules

• Investment Limits: Companies can invest up to 5% of their assets in cryptocurrencies.
• Approved Cryptocurrencies: Only the top 20 cryptocurrencies by market size are eligible.
• Regulated Exchanges: Investments must be made through the five largest regulated exchanges in Korea.
• Stablecoins: The FSC is still considering whether to include stablecoins like Tether’s USDT.

The new rules were shared with the FSC’s crypto team on January 6 and are expected to be fully implemented by February.

Potential Impact

• Increased Investment: This change could attract significant investment into the crypto market. For instance, Naver, a major South Korean internet company, could potentially invest a substantial amount in Bitcoin.
• National Stablecoin and ETFs: The move might accelerate the launch of a national stablecoin and Bitcoin ETFs.
• Growth of Local Crypto Companies: It could boost the growth of local crypto firms and attract more investment in digital assets.

South Korea’s Digital Currency Plans

• CBDC Adoption: By 2030, South Korea aims to have 25% of national funds managed through a central bank digital currency (CBDC).
• Stablecoin Licenses: The country plans to introduce licenses for stablecoin issuers, ensuring full reserves and protecting user rights.

Conclusion

This significant shift in South Korea’s crypto regulations demonstrates the country’s commitment to embracing digital assets. It could lead to increased innovation and investment, positioning South Korea as a leader in the global crypto market.