South Korea’s fast-growing crypto market is heading into a critical phase as regulators move to set firm limits on how much digital assets companies and professional investors can hold. The country’s Financial Services Commission (FSC) is planning to cap corporate and professional crypto holdings at 5% of a company’s equity capital each year, a step that could shape how institutional money enters the market.
According to reports, the FSC’s draft guidelines would allow corporations to invest only in the top 20 cryptocurrencies by market capitalization. This approach is designed to steer institutional demand toward more established assets, reducing risk as larger players begin trading. Bitcoin is expected to be the main beneficiary of this structure, with Ethereum also likely to attract a significant share of inflows.
One unresolved issue is whether U.S. dollar–pegged stablecoins such as USDT will be included in the approved list. Regulators are still debating their role, reflecting broader questions about how stablecoins should fit into South Korea’s evolving digital asset framework.
The final version of these rules is expected to be released between January and February, with corporate trading potentially opening later in the year. Alongside the 5% cap, the FSC plans to introduce price limits and split trading rules. These measures aim to control volatility and prevent sharp market swings as institutional participation increases.
Market analysts say the cap itself is unlikely to be a major hurdle in the short term. Most companies are not expected to approach the 5% threshold immediately, especially during the early stages of adoption. Instead, the more noticeable effect could be a concentration of liquidity in large-cap cryptocurrencies, leaving smaller altcoins with limited institutional support.
Beyond the holding limits, attention is turning to the upcoming Digital Asset Basic Act, which is expected in the first quarter. This legislation is set to define the regulatory framework for won-pegged stablecoins and could pave the way for South Korea’s first spot crypto exchange-traded funds (ETFs). Many in the industry see this law as a turning point that could reshape the local crypto market’s structure.
Stablecoin regulation is viewed as particularly important. Clear rules around won-backed stablecoins could strengthen the broader crypto ecosystem by improving payment use cases and increasing trust among both users and institutions.
Overall, the FSC’s strategy highlights a cautious but deliberate approach. By allowing limited institutional access while putting guardrails in place, regulators aim to balance innovation with market stability. As South Korea moves closer to opening its doors to corporate crypto investors and spot ETFs, the coming months are likely to determine whether the market can absorb institutional capital without losing its footing.
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