South Korea to Allow Spot Bitcoin ETF by 2026, Considers Up to 25% Treasury Crypto Allocation by 2030
South Korea has announced plans to enable a spot Bitcoin ETF by 2026 as part of its 2026 Economic Growth Strategy and will pass a Digital Asset Second-Phase Act this year to create a legal framework for spot crypto ETFs. The legislation will introduce stablecoin rules, issuer licensing, capital requirements, cross-border transfer controls and custody/issuance frameworks intended to expand regulated institutional access to crypto. Seoul is also exploring rules to permit up to 25% of certain treasury or public funds to be allocated to digital assets by 2030, and is considering amendments to the Bank of Korea Act and Treasury Administration Act to legalize blockchain-based payments, settlements and the potential use of crypto wallets for government transactions. Recent policy shifts include easing venture-capital access for crypto firms, examining deposit tokens backed by commercial bank deposits, and growing institutional activity such as Binance’s acquisition of Korean exchange Gopax and ongoing local listings. The government cited US and Hong Kong spot-ETF precedents in shaping its approach. Key uncertainties remain on the exact ETF launch timing, approved asset scope (currently focused on Bitcoin), custody rules, taxation and implementation details. For traders: a South Korea spot Bitcoin ETF could broaden institutional demand and onshore liquidity, while stablecoin and custody rules may support product development — but market impact will depend on specifics and timing.
Bullish
The announcement is likely bullish for BTC price risk/reward because enabling a regulated spot Bitcoin ETF in South Korea opens a new onshore, institutional channel for capital into Bitcoin without requiring direct custody by investors. ETF frameworks in major markets (US, Hong Kong) previously supported demand and product flows; a Korean ETF could similarly attract domestic institutional and retail flows, increase onshore liquidity, and encourage related product development (custody, listed funds). Progress on stablecoin regulation and custody rules increases the odds of smoother fiat-crypto rails and trading infrastructure, which supports sustained demand. Short-term impact may be muted or mixed because the government set a 2026 timeframe with many details unresolved — timing, asset scope, custody, tax and implementation specifics — so traders may see incremental bullishness on ETF-related speculation and local listings rather than an immediate large price impulse. Long-term, if rules are favorable and treasury allocations or broad institutional adoption occur, structural demand could be material and supportive of higher prices. Risks that could temper the bullish effect include restrictive custody/tax rules, slow legislative timelines, or caps on asset types.