South Korea Takes Step to Open Crypto Market to Corporate Investors

South Korea is preparing to formally allow listed companies and professional investment firms to trade cryptocurrencies, marking a major shift in how the country sees and trades digital assets. It was recorded that the financial regulators finalized the draft guidelines that would permit corporate participation for investment and treasury purposes.

According to a recent report, the final decision is expected to be released in a few weeks’ time. The move could unlock significant institutional capital and also reshape the domestic digital assets market in South Korea.

South Korea Sets Clear Limits to Reduce Cryptocurrency Market Risk

According to financial industry sources, the Financial Services Commission has created new rules that would serve as guidelines for cryptocurrency trading. They did this by listing different corporations and sharing them with a joint public-private task force earlier in the month. Once the listing process becomes officially released, the guidelines will allow companies to engage in digital assets transactions after the Framework Act on Digital Assets takes effect in the first quarter of the year.

To manage users’ exposure, the regulators have capped annual cryptocurrency investments at five percent of a company’s equity capital. So basically, all eligible assets will be restricted to the top 20 cryptocurrencies based on their market value, as identified by the country’s five major exchanges. Also, the authorities would also be reviewing whether dollar-backed stablecoins like USDT should be included in the approved list.

Also Read: South Korea’s Crypto Market Slows as VASP Approvals Drop by Half

Additionally, safeguards are also being introduced to reduce market volatility. Some of these include controls on fractional trading and also limits on unusually large or irregular orders placed on exchanges. Officials believe that by doing this, it would prevent excessive speculation whilst also maintaining market stability.

While the industry has largely welcomed the decision, some market participants argue that the investment ceiling is too strict. Critics warn that restrictions as tight as this could discourage capital inflows and delay the growth of specialized crypto-based investment firms.

Despite these concerns, the expectations still remain high, as analysts estimate that tens of trillions of won could enter the market once corporate participation begins. For example, a company that has equity of about 27 trillion won could acquire over 10,000 bitcoins by allocating the maximum allowed amount. With institutional access expanding, regulators expect that there would be faster progress toward won-backed stablecoins and the approval of Bitcoin spot exchange-traded funds.

Also Read: South Korea Ends Nine-Year Ban, Opens Crypto Investing for Corporations