- The People Power Party, South Korea’s ruling party, promises to amend its crypto ban to allow spot Bitcoin ETFs in the country and other cryptocurrency-related investment products.
- The reversal of their stance is seen as an attempt to sway young voters in their favor.
Previous Stance of South Korea Against Spot Bitcoin ETFs
Previously, the Republic of Korea reiterated its ban on the ownership of cryptocurrencies by financial institutions. This was the official statement of the Yoon Suk Yeol administration despite the approval of spot Bitcoin exchange-traded funds (ETFs) in the US.
Citing an unnamed Financial Services Commission official as a source, South Korean news outlet Kyunghyang reported that the country’s financial regulator remained committed to its earlier ruling against institutional crypto investments.
“The government has consistently maintained the principle of prohibiting financial institutions from investing in virtual assets in order to stabilize the financial market and protect investors,” said the official.
Change of Tune Amid the Coming Elections
With the next legislative elections happening on April 10 this year, the ruling party of the nation appeared to have softened its stance on institutional crypto ownership. According to South Korea’s News1, the People Power Party pledged to introduce reforms that could eventually allow the entry of spot Bitcoin ETFs in the country.
The candidates also promised to seek legislative remedies that could pave the way to the entry of other cryptocurrency-related products that have already been deemed legal in developed countries like the US. Likewise, they are looking for a measure to gradually ease up its crypto ban on institutional investments and initial exchange offerings (IEO).
They clarified, however, that they will initially limit the accumulation of crypto assets for investment firms with “investor protection measures” to probably test the waters before allowing banks and insurance firms to take a dip into these products. That way, the protection of user funds by the latter is prioritized.
At the same time, the right-wing politicians revealed their plan of creating a “Digital Asset Promotion Committee” that would propose laws, enforce sanctions, and overlook the digital asset sector of the country.
Furthermore, they vowed to review the discrepancies in the classification of virtual asset exchanges in the nation’s financial laws. Early on, South Korea’s Ministry of SMEs and Startups categorized them with gambling and entertainment businesses. Along the way, they also endorsed large exchanges Upbit and Bithumb as “unicorns.”
An Effort to Gain Young Voters
The move obviously resonates as an attempt to sway crypto-savvy young voters in the party’s favor. According to the country’s National Tax Agency, around 80% of cryptocurrency holders in the area are within the 20s to 30s age bracket.
In a related news from The Block, citing the Herald Business Daily as the source, the People Power Party is studying the possibility of postponing the taxation on crypto gains from 2025 to 2027 to reinforce its appeal to the crypto community.