South Korea Moves to Approve Bitcoin ETFs as Grayscale Prepares New Crypto Products

South Korea Embraces Spot Bitcoin ETFs

South Korea is preparing to open its financial markets to spot bitcoin exchange-traded funds this year, representing a significant departure from the country's previous stance on digital assets ^[1]. The initiative was detailed in the government's newly released 2026 Economic Growth Strategy, with the Financial Services Commission leading the implementation effort ^[1].

Once approved, spot bitcoin ETFs would become accessible to domestic investors for the first time, positioning South Korea alongside markets including the United States and Hong Kong, where comparable products have already generated billions of dollars in inflows ^[1].

Until now, Korea's capital markets regulations have not recognized cryptocurrencies such as bitcoin or bitcoin ETFs as eligible underlying assets for exchange-traded funds, effectively preventing their introduction ^[1]. Policymakers are now reversing this position in an effort to channel more crypto activity into regulated frameworks and reduce capital outflows to offshore platforms ^[1].

The Financial Intelligence Unit estimates that more than 10 million people are eligible to trade digital assets within South Korea, highlighting the substantial potential demand for such products ^[1].

Comprehensive Digital Asset Legislation in Development

The bitcoin ETF initiative is advancing alongside a broader restructuring of digital asset regulation ^[1]. The Financial Services Commission is expediting what it terms "Phase Two" digital asset legislation, a bill anticipated to concentrate heavily on stablecoins ^[1].

According to government plans, the proposed law will establish a licensing system for stablecoin issuers, minimum capital requirements, and stringent reserve rules mandating at least 100% backing of issued tokens ^[1]. Issuers would also be obligated to guarantee user redemption rights ^[1].

Regulators state that the framework is designed to prevent failures similar to the 2022 Terra-Luna collapse, which eliminated approximately $40 billion and had significant connections to South Korea ^[1]. Beyond domestic regulations, authorities are developing standards for cross-border stablecoin transfers and transactions, coordinated between the Financial Services Commission and the Ministry of Economy and Finance ^[1].

The government is also planning to digitize portions of the national treasury using "deposit tokens," a form of government-linked digital currency distinct from stablecoins ^[1]. By 2030, up to 25% of treasury operations could be conducted through blockchain-based payments, with pilot programs already underway ^[1].

Grayscale Establishes Trusts for Potential New Products

Meanwhile, U.S. asset manager Grayscale has taken steps to expand its cryptocurrency investment offerings by establishing new statutory trusts in Delaware that could be associated with products based on BNB and HYPE ^[2]. According to Delaware records, the trusts were registered on Thursday, with CSC Delaware Trust Company listed as the registered agent ^[2].

Such trust formations are typical preparatory measures by asset managers considering the launch of exchange-traded funds before filing official applications with the Securities and Exchange Commission ^[2]. However, they do not represent regulatory approval and do not confirm that applications have been submitted ^[2].

Despite the registration, Grayscale has not publicly confirmed whether the company intends to file ETF applications related to the newly established trusts ^[2]. The formation of a Delaware trust is frequently viewed as an administrative preparation rather than a regulatory milestone, with issuers typically establishing such vehicles to simplify later filings once market conditions and regulatory clarity improve ^[2].

The move comes during a period when the asset manager has struck an optimistic tone for the coming year, having published a bullish research report on Monday ^[2]. However, Bitcoin and Ethereum ETFs have recently experienced an abrupt reversal with massive outflows ^[2].