South Korea May Follow Japan’s Lead on Bitcoin ETFs

Asia’s BTC ETF race is expected to heat up as Japan eyes legislation in the second half of 2025.

South Korea may join the Bitcoin (BTC) ETF bandwagon due to Japan’s softer stance on cryptocurrencies. According to a report from Maeil Business Newspaper, Seoul could approve BTC ETFs if Tokyo grants them the go-ahead.

The Financial Supervisory Service (FSS) of South Korea is closely monitoring trends in Japan’s virtual asset landscape and appears open to crypto ETFs. Japan’s discussions around virtual assets are expected to conclude in the first half of 2025, with legislation being drafted in the second half. By 2026, Japan’s national assembly may vote on the framework.

Bitcoin ETF: Will South Korea Follow Japan?

Japan’s plans are pivotal, as South Korean authorities have hesitated to approve BTC ETFs, referencing the lukewarm responses from Japan and the UK. Kim So Young, Vice Chairman of South Korea’s FSS, previously expressed caution regarding Bitcoin spot ETFs, stating,
> “I will carefully review (Bitcoin spot ETFs), and it is still similar in a big context…There are some countries that have not yet introduced them, there is the UK or Japan.”

How South Korea will react to Japan’s initiative remains uncertain. However, several regions have become receptive to BTC ETFs since the U.S. approved these products last year, facilitating buying and selling Bitcoin through traditional stock markets. Currently, U.S. spot BTC ETFs boast $100 billion in assets under management (AUM).

Following the U.S., Hong Kong approved BTC ETFs last April and has reported $354 million in AUM. The BTC price surged from $40,000 to $70,000 with the integration into stock markets, later exceeding $100,000 due to the ‘Trump trade.’

State Street forecasts that crypto ETF AUM may surpass precious metals ETF AUM by late 2025, indicating increasing market optimism. In BlackRock’s 2025 ETF outlook report, Robert Mitchnick, head of digital asset research, noted that U.S. fiscal debt and the adoption of Bitcoin by nation-states as an alternative reserve asset could boost its value.
> “An increasing focus on U.S. debt and deficit challenges has the potential to serve as a catalyst for Bitcoin adoption, while the possibility of higher-for-longer interest rates represents a potential price headwind.”