South Korea Introduces New Limit on Corporate Crypto Investments

South Korea has officially ended a nine-year ban on corporate investments in cryptocurrencies. Under the new rules, listed companies and professional investors can now allocate up to 5% of their equity capital to the top 20 cryptocurrencies by market capitalization on the country's five major exchanges. The Financial Services Commission (FSC) aims to finalize the Virtual Currency Trading Guidelines for Listed Corporations in early 2026.

The move forms part of the nation's broader 2026 Economic Growth Strategy. The strategy includes stablecoin legislation and plans for spot Bitcoin exchange-traded funds (ETFs). The goal is to attract large-scale capital into the domestic crypto market while reducing speculative trading.

Regulators have introduced additional safeguards, including staggered execution and order size limits on exchanges to manage volatility. Stablecoins like Tether's USDT remain under review to determine eligibility as investment assets.

Why Did This Happen?

The ban on corporate crypto investments was initially imposed in 2017 over concerns about money laundering and speculative trading. Retail investors have dominated the market since then, accounting for nearly all trading activity. The government now aims to rebalance the market by enabling institutional participation. The policy shift is also seen as a response to global trends, including the approval of spot Bitcoin ETFs in the U.S. and Hong Kong according to market analysis.

How Did Markets React?

Market observers believe the change could significantly reshape South Korea's crypto landscape. With large corporations allowed to hold digital assets, the market may see reduced volatility and increased liquidity. For example, a company with 27 trillion won in equity could theoretically hold over 10,000 Bitcoin under the new rules.

The FSC also plans to regulate stablecoin issuance and introduce reserve requirements, ensuring these assets are fully backed by user deposits. This aligns with broader regulatory efforts to bring crypto into the regulated financial system.

What Are Analysts Watching Next?

Industry participants have mixed reactions to the 5% cap. While some see it as a necessary step to manage risk, others argue it is overly restrictive compared to the U.S. or Japan, where no such limits exist.

Regulatory clarity is also a key focus. The new framework aims to provide legal recognition for cryptocurrencies as valid assets. This follows recent court rulings recognizing digital assets as property that can be seized in legal proceedings.

The FSC will release final guidelines within January or February 2026, aligning with the expected introduction of the Digital Asset Basic Act in Q1 2025. Corporate trading is expected to begin by year-end 2026, with the market anticipating further reforms in the coming years.

The shift in policy could also accelerate the introduction of won-denominated stablecoins and spot Bitcoin ETFs. With more institutional capital entering the market, South Korea is positioning itself as a key player in the global crypto economy.