Korea to Pass Stablecoin Laws in Q1, Allow Spot Crypto ETFs

Group 1: Digital Asset Strategy Overview - South Korea has unveiled a comprehensive digital asset strategy as part of its "2026 Economic Growth Strategy," marking a shift towards institutional adoption and industry development [1] - The strategy includes stablecoin legislation, spot ETF approvals, and blockchain-based government payments, representing the most significant overhaul since the Terra-Luna collapse in 2022 [1] Group 2: Stablecoin Legislation - The Financial Services Commission (FSC) will finalize the "Digital Asset Phase 2 legislation" by Q1 2026, establishing a regulatory framework for stablecoins [2] - Stablecoin issuers will need government authorization, maintain reserve assets equivalent to at least 100% of issued tokens, and guarantee users' redemption rights [2][3] - The framework aims to prevent incidents similar to the 2022 Terra-Luna crisis, which resulted in a loss of approximately $40 billion in market value [3] Group 3: Spot Crypto ETFs - South Korea plans to introduce spot digital asset ETFs in 2024, following successful launches in the United States and Hong Kong [4] - This regulatory change will allow domestic investors access to cryptocurrency ETFs, which were previously not recognized as eligible underlying assets [4] - Market observers anticipate that this approval will accelerate institutional participation, including investments from pension funds and corporate treasuries [5] Group 4: Blockchain in Public Finance - The strategy includes integrating blockchain technology into government operations, with a goal of executing one-quarter of national treasury disbursements using digital currency by 2030 [6] - A pilot program will launch in H1 2026, applying deposit tokens to subsidies for electric vehicle charging infrastructure, with potential expansion to other vouchers and subsidies [7] - This approach aims to enable real-time tracking of fund usage, reduce administrative costs, and eliminate subsidy fraud [7]