Min Byung-deok Proposes Amendment to the Capital Markets Act... Bitcoin Spot ETF Institutionalization Begins

It is expected that spot Exchange-Traded Funds (ETFs) based on digital assets such as Bitcoin will soon be available in the domestic capital market. With a bill for the institutionalization of digital asset ETFs—one of President Lee Jae-myung's key pledges—submitted to the National Assembly, the formal inclusion of digital asset-based financial products is gaining momentum.

On the 27th, Min Byung-deok, a member of the Democratic Party of Korea, officially proposed an amendment to the 'Capital Markets Act.' This amendment would include digital assets within the scope of underlying assets and trust properties for financial investment products. If the bill passes, it is anticipated that various financial products—including ETFs based on digital assets—can be developed.

The amendment also provides a legal basis for trust companies to custody and manage digital assets and allows them to delegate custody and management duties to virtual asset service providers. The requirements and procedures for such delegation are clearly specified to strengthen investor protection. Additionally, new regulations would be established to permit over-the-counter trading of digital asset-based derivatives.

This legislative initiative reflects the government's intention to lay an institutional foundation for the digital asset industry, along with the recent approval for the issuance of won-based stablecoins. If the bill passes, institutional and corporate investors, whose entry is expected in the second half of this year, will be able to participate in the market under a formal regulatory framework.

Representative Min Byung-deok stated, "This amendment to the Capital Markets Act will be an opportunity to achieve both innovation in the domestic capital market and investor protection," adding, "Once digital assets are incorporated into regulated financial products, the global competitiveness of South Korea's financial industry will be enhanced, providing investors with a safer and more transparent investment environment."