South Korea Lifts Crypto Ban Allowing Firms 5% Equity Investment

TLDR

• Listed firms in Korea can invest 5% of equity in top 20 cryptocurrencies.
• Stablecoin rules and ETFs will be finalized under new law in 2026.
• South Korea aims for 25% treasury allocation via digital assets by 2030.
• $52B in offshore crypto capital expected to return under new rules.

South Korea has officially lifted a nine-year ban on corporate cryptocurrency investments, allowing listed firms to allocate a portion of their equity capital to top digital assets. The decision marks a strategic shift by the Financial Services Commission (FSC) to regulate and integrate digital finance into the country’s broader economic framework.

Regulatory Change Ends Nine-Year Restriction

South Korea’s Financial Services Commission (FSC) has formally ended a nine-year prohibition on corporate cryptocurrency investments. Listed companies and qualified investors are now allowed to invest up to 5% of their equity capital in digital assets. The rule applies only to the top 20 cryptocurrencies by market capitalization, and investments must be made via the country’s five licensed exchanges.

The FSC stated that the move is part of its broader 2026 Economic Growth Strategy. The updated guidelines were shared with the agency’s crypto working group in early January. Final rules will be confirmed between January and February 2026.

According to the FSC, the previous restriction caused about $52 billion in Korean capital to move to foreign platforms. The revised policy aims to redirect this capital into Korea’s regulated markets.

Conditions and Scope of New Investment Policy

The new rule permits only digital assets that rank within the top 20 by global market capitalization. These must also be available on one of South Korea’s five licensed exchanges. Cryptocurrencies outside this list remain off-limits for now.

Stablecoins such as Tether’s USDT are still under review and may be included once the Digital Asset Second-Phase Act passes later in 2026. This act will also set a legal foundation for crypto exchange-traded funds (ETFs) and introduce a reserve requirement and licensing for stablecoin issuers.

To manage market volatility, the FSC has set order size limits and implemented staggered trading schedules. These technical controls are designed to avoid sudden price swings as institutional funds enter the market.

Economic Strategy and Government Goals

The new policy is part of a broader plan to modernize South Korea’s financial infrastructure. The government has announced its goal to allocate 25% of national treasury funds via digital assets by 2030. A pilot project using deposit tokens for electric vehicle subsidies is scheduled for the first half of 2026.

Officials also confirmed plans to introduce Bitcoin ETFs, which have gained popularity in markets like the United States and Hong Kong. The FSC aims to follow a similar model, enabling institutional participation through regulated financial products.

The policy shift is expected to benefit domestic firms that previously had to invest overseas. Korean internet giant Naver, which holds ₩27 trillion ($18.4 billion) in equity, could now allocate up to ₩1.35 trillion toward crypto under the 5% limit.

Industry Reaction and Future Developments

The policy change was widely acknowledged by the local crypto industry. Analysts expect large inflows of institutional capital as listed companies begin to participate. Approximately 3,500 companies are eligible under the new rule.

While some market watchers view the 5% cap as conservative compared to U.S. or EU models, regulators have stated that the phased approach is intended to ensure market stability. The final list of approved cryptocurrencies and technical rules is expected soon.

The upcoming Digital Asset Second-Phase Act will clarify ETF structures, finalize stablecoin rules, and expand access to crypto investment by banks and pensions.

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