South Korea Lifts Ban on Corporate Crypto Investments

On January 12, the Financial Services Commission (FSC) of South Korea ended a nine-year ban, allowing listed companies to invest in cryptocurrencies, impacting nearly 3,500 entities.

This policy potentially unlocks billions in corporate investment, fueling Korea’s digital asset market expansion. Uncertain stablecoin classification might impact market participation.

South Korea Authorizes 3,500 Entities for Crypto Investments

The South Korean Financial Services Commission (FSC) has brought an end to a longstanding prohibition on corporate cryptocurrency holdings. Companies and registered professional investment institutions can now allocate up to 5% of their net assets annually into the top 20 cryptocurrencies traded on the country’s major exchanges.

These regulatory adjustments include staggered execution orders and size limits to mitigate potential risks. Approximately 3,500 corporate entities are granted access to cryptocurrency investments, potentially altering the dynamics of South Korea’s financial landscape.

Reactions from the crypto market have been positive, with industry participants viewing the decision as a crucial step toward broader digital asset adoption and market development. Key industry figures have yet to publicly address the corporate allocation rule specifically, though there’s optimism about increased liquidity and institutional participation.

Regulatory Changes Expected to Boost Crypto Adoption

Did you know? South Korea’s decision to authorize corporate crypto investments signals a marked policy shift reminiscent of post-Terra regulations that significantly tightened the digital assets framework following a notable market collapse.

According to CoinMarketCap, Bitcoin (BTC) currently trades at $91,993.89, with a market cap of $1.84 trillion and a dominance of 58.49%. Over the past 90 days, the price has declined by 18.99%. The asset has a maximum supply of 21 million BTC with 19,974,728 currently circulating.

Coincu’s research team anticipates that South Korea’s new regulations will spur financial growth, fostering a more technologically integrated market. Historical trends suggest increased interest from institutional investors could lead to more stable market practices and advancements in fintech regulatory environments.