South Korea ends corporate ban on digital currencies after nine years

South Korea’s Financial Services Commission (FSC) said it has finalized guidelines allowing listed companies and professional investors to trade cryptocurrencies.

The move ends a nine-year ban on investments by digital companies and continues… The government’s broader economic growth strategy for 2026,” which includes the stablecoin legislation and spot ETF approvals announced last week.

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Institutional investment framework

In accordance with the Financial Services Council guidelines reported Local media reportEligible companies can invest up to 5% of their annual capital. Investment targets are limited to the top 20 cryptocurrencies by market capitalization on the five major exchanges in Korea.

About 3,500 entities will gain access to the market once the rules come into effect. These include publicly traded companies and registered professional investment firms.

Whether dollar-pegged stablecoins like Tether’s USDT are eligible is still up for debate. Regulators also require exchanges to implement execution and order size limits.

Market context

These guidelines constitute the first regulatory signal for corporate cryptocurrency investment since 2017. The forbidden authority Institutional participation amid money laundering fears.

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The long ban has shaped the cryptocurrency market in Korea in various ways. Individual investors constitute almost 100% of commercial activity. Capital flight reached 76 trillion won ($52 billion) as traders sought opportunities abroad. The contrast with mature markets is clear. In Coinbase, institutional trading accounted for more than 80% of trading volume in the first half of 2024.

Industry participants expect this opening to accelerate the momentum of bitcoin-denominated stablecoin funds and domestic flash Bitcoin funds.

Industrial reaction

While sector participants welcome this policy change, they see the 5% cap as too conservative, noting that the United States, Japan, Hong Kong and the European Union do not impose similar limits on corporations in cryptocurrencies.

Critics warn that this restriction could prevent the rise of digital asset custodians — companies like Japan’s Metaplanet that build corporate value through the strategic accumulation of bitcoin.

“Applying excessive regulations only to cryptocurrencies may leave Korea behind the acceleration of global markets,” an industry official told the platform.

The next steps

The FSC plans to issue final guidance during January or February. The implementation timing corresponds to Digital Assets Basic Law, Decision Its legislative introduction in the first quarter of 2025. Institutional trading is expected to begin at the end of the year.