South Korea plans to limit corporate and professional cryptocurrency holdings to 5% of stocks and direct most institutional inflows to the top 20 coins until it finalizes rules for ETFs and stablecoins.
summary
- FSC Under the draft guidelines, companies will only be able to purchase the top 20 coins by market capitalization, but there is ongoing debate over whether to include dollar stablecoins such as: USDT.
- The final rules, expected by February, will likely add price limits and fractional trading to limit the volatility associated with the entry of financial institutions, and will likely concentrate liquidity in Bitcoin and possibly Ethereum.
- The upcoming Digital Asset Basic Act will set rules for won stablecoins and open the door to South Korea’s first spot crypto ETF, which is seen as crucial to the domestic market structure.
South Korea’s Financial Services Commission plans to limit corporate and professional investors’ holdings of cryptocurrencies to 5% of their annual capital, according to reports.
Under the draft guidelines, companies would be allowed to invest in cryptocurrencies up to the top 20 by market capitalization. Includes stablecoins pegged to the US dollar, such as USDT According to reports, the matter is still under discussion.
South Korea plans to impose 5% virtual currency cap on companies
The final rules are expected to be finalized between January and February, with business transactions expected later this year, the report said. The proposed framework would also establish price limits and split trading rules aimed at mitigating volatility as corporate participation increases.
You may also like: Perp DEX traders are pivoting from airdrop hunting to CEX-style execution quality
Analysts said the cap would likely improve liquidity, but would have a limited impact on small-cap altcoins, with flows concentrated in Bitcoin (BTC) and potentially Ethereum. Observers noted that the 5% limit may not be a significant constraint, as most companies are unlikely to exceed this limit in the early stages.
Market participants are keeping an eye on the country’s Digital Asset Basic Law, scheduled for the first quarter. According to reports, the bill will formalize regulations for stablecoins pegged to the won and introduce the country’s first spot virtual currency exchange-traded fund.
The stablecoin rules are seen as particularly impactful for South Korea’s broader cryptocurrency ecosystem, market participants said.
Analysts say the FSC’s actions reflect a prudent approach to expanding institutional investors’ access to cryptocurrencies while protecting market stability amid growing corporate interest.
read more: Binance bulls face a test of victory as spot dominance drops by 25%
