South Korean Presidential Candidates Back Bitcoin ETFs, Institutional Investment

All three major South Korean presidential candidates have publicly declared their support for the approval of Bitcoin spot ETFs and the inclusion of institutional investors in the country’s cryptocurrency market. This development is significant given the current regulatory environment in South Korea, which prohibits the issuance and trading of Bitcoin ETFs and restricts institutional participation. As a result, 100% of crypto trading volume in the country is driven by retail investors, leading to a distinctive market phenomenon known as the ‘Kimchi Premium,’ where local Bitcoin prices often exceed global averages by a significant margin.

This unified stance among the presidential candidates—Kim Moon-soo (People Power Party), Lee Jae-myung (Democratic Party), and Lee Jun-seok (Reform Party)—suggests a potential major regulatory shift in South Korea. Allowing institutional investment could introduce substantial capital into the market, increasing liquidity and potentially reducing the Kimchi Premium. Additionally, introducing Bitcoin ETFs could help align South Korea’s crypto market with global standards, making it more competitive on the international stage.

The upcoming presidential election, scheduled for June 3, 2025, has brought cryptocurrency regulation to the forefront of political discourse in the country. The candidates' support for Bitcoin ETFs reflects a growing political consensus on the need to integrate cryptocurrencies into the mainstream financial system. This move is seen as a response to the increasing global acceptance of digital assets and a strategic effort to appeal to the tech-savvy and financially literate segments of the population.

South Korea has implemented strict regulations for cryptocurrencies in recent years, including real-name account systems for crypto exchanges and a ban on privacy coins. Despite these regulations, the country has seen significant developments in the crypto industry, with major companies investing in crypto and blockchain initiatives. The Bank of Korea has been running Central Bank Digital Currency (CBDC) trials, and conglomerates like SK Group and LG CNS are investing in blockchain logistics, supply chain, and digital identity projects.

The candidates' endorsement of Bitcoin ETFs also reflects a broader trend of institutional acceptance of cryptocurrencies. By allowing institutional investment in Bitcoin ETFs, South Korea could attract more capital into its financial markets, potentially boosting economic growth. However, this move would require robust regulatory measures to protect investors from the volatility and risks associated with cryptocurrencies. The upcoming presidential election will be a crucial test of the candidates' commitment to their pro-crypto stances and their ability to balance innovation with financial stability.