South Korea Allows Listed Firms to Invest in Crypto After 9 Years

South Korea has ended a nine-year ban on corporate investments in cryptocurrencies, according to the Financial Services Commission (FSC). Listed companies and professional investors can now allocate up to 5% of their equity capital to digital assets. The change allows approximately 3,500 companies and institutions to participate in the crypto market for the first time since 2017. The decision was confirmed by the FSC in January 2026 as part of a broader regulatory update.

The move is a key component of South Korea's 2026 Economic Growth Strategy. This includes plans for stablecoin regulation and the launch of spot Bitcoin exchange-traded funds (ETFs) in the coming years. The government aims to integrate digital assets into its financial infrastructure and expand institutional participation in the sector.

Investment is limited to the top 20 cryptocurrencies by market capitalization, available on South Korea's five major exchanges. Stablecoins like Tether's USDT are still under review for inclusion in the framework. The FSC has emphasized the need for risk mitigation and market stability as corporate capital enters the space.

Why Did This Happen?

South Korea first banned corporate crypto investment in 2017 over concerns about money laundering and market volatility. The prohibition led to a retail-driven market and significant capital outflows to foreign exchanges, estimated at $52 billion. By lifting the ban, the FSC hopes to redirect this capital into regulated domestic platforms.

The decision also aligns with global regulatory trends. The government cited the success of U.S. and Hong Kong-based Bitcoin ETFs as a model for its own product launch in 2026. A phased approach to easing restrictions was announced in February 2025, leading to the finalization of rules in early 2026.

How Did Markets React?

The news was broadly welcomed by the crypto industry. Analysts suggested that the move could bring tens of trillions of won into the market. Major companies like Naver could theoretically allocate significant funds to cryptocurrencies under the new rules.

However, critics argue the 5% cap is more restrictive than regulations in the U.S., Japan, and the EU. Some industry participants warned that the restriction could limit the emergence of Korean digital asset treasury firms similar to Japan's Metaplanet.

The FSC has also introduced technical safeguards to reduce volatility, including limits on order sizes and staggered trading requirements. These measures are intended to prevent sudden price swings as institutional liquidity enters the market.

What Are Analysts Watching Next?

The FSC plans to release final guidelines in January or February 2026. This will clarify trading parameters and finalize the list of eligible assets. The inclusion of stablecoins remains a key point of discussion.

Another focus is the potential approval of spot Bitcoin ETFs. The government confirmed it will pass the Digital Asset Second-Phase Act this year, which includes stablecoin rules and ETF frameworks. This could accelerate institutional adoption of crypto assets by pension funds and corporate treasuries.

Long-term, South Korea aims to integrate blockchain into government operations. A pilot program using deposit tokens for electric vehicle subsidies is planned for the first half of 2026. By 2030, the government hopes to allocate 25% of its treasury funds through digital assets.

The shift reflects a broader strategy to position South Korea as a global leader in digital finance. As the country moves forward, it will need to balance regulatory oversight with innovation to ensure a competitive and secure market.