South Korea's securities and derivatives exchange operator Korea Exchange (KRX) plans to add new investment products, including crypto exchange-traded funds (ETFs) and derivatives, as part of a broader effort to modernize its capital markets.
At a ceremony on the first trading day of the new year, KRX Chairman Jung Eun-bo suggested that the exchange is operationally ready to support crypto ETFs, even as regulators continue to consider whether such products can be approved under existing securities regulations.
Chung described the move as part of South Korea's efforts to break away from the “Korea discount” phenomenon, where domestic stocks trade at lower valuations than their global peers. In the case of virtual currencies, the power relationship is different, with Bitcoin often trading at a premium on domestic exchanges compared to overseas platforms.
He also pointed to other initiatives, including a gradual transition to 24-hour trading and accommodating digital finance.
No new regulatory approvals were announced in his New Year's speech, but he highlighted growing collaboration between market operators and policymakers as the country assesses whether it can integrate cryptocurrencies into its traditional financial system.
Infrastructure development completed, regulations still undecided
KRX’s comments come as South Korean regulators continue to review the legal status of crypto-based investment products.
Under current rules, cryptoassets are not classified as eligible underlying securities, effectively blocking cryptoasset-based ETFs despite growing investor demand.
The Financial Services Committee previously said it was considering potential reforms through its virtual currency expert committee, including whether digital assets would be recognized within the Capital Markets Act.
While regulators consider these decisions, KRX's message suggests market infrastructure may no longer be a limiting factor. By publicly demonstrating that they are ready to list and trade products linked to cryptocurrencies, exchanges are poised to move quickly once they overcome regulatory hurdles.
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Crypto ETFs gain momentum, but approval remains stagnant
Support for crypto ETFs has been growing across the country's financial and political circles over the past year.
The chairman of the Korea Financial Investment Association (KOFIA) said in February that the industry will push for the listing of Bitcoin and Ether ETFs in the country to meet the growing demand from investors seeking regulated exposure to cryptocurrencies.
The issue has since entered mainstream politics ahead of June's presidential election. In May, Democratic Party presidential candidate Lee Jae-myung promised to approve a spot virtual currency ETF if elected. Mr. Lee went on to win elections.
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