Bitcoin liquidity is about to tighten due to South Korea’s new law that legally excludes 99% of buyers.

In theory, South Korea has long been one of the world’s most noisy crypto markets. In reality, it was oddly narrow.

Ordinary people can trade on high-value won exchanges. Most companies with cash on their balance sheets are sitting idle.

That is finally starting to change.

This week, the Seoul Economic Newspaper reported that the Financial Services Commission shared a draft of the “Virtual Asset Trading Guidelines for Listed Companies” with an industry-government task force on January 6th. Regulators aim to publish the final version in January or February.

The actual heading is simple. Following a ban dating back to 2017, publicly traded companies and registered professional investor companies will once again be allowed to invest corporate funds in cryptocurrencies.

The human version is messier and more interesting.

For someone running the finance department of a Korean company, cryptocurrencies were something to observe, study, and build upon. But if your relationship with your bank doesn’t become a compliance headache, you can’t really tackle it at home.

South Korean regulators haven’t written “no” into any formal law for all corporate transactions. Instead, they relied on banks and gatekeeping of “real name” accounts.

The results looked the same. Corporate funds stagnated.

Now, the guidelines describe how to open the door in a controlled manner.

What will change and who will be able to purchase it?

The draft framework is built around three major constraints.

1. purchasers.
   The entities explicitly named are listed companies and professional investment corporations. This means companies that meet the registration standards based on the Korean capital market framework, and small and medium-sized enterprises do not open exchange accounts on a whim. The number being discussed is about 3,500 companies that could potentially qualify.
2. size.
   The reported limit is an annual “deposit” or investment cap of up to 5% of a company’s equity capital. It’s conservative by design. This could prevent the first wave from turning into an onslaught of national corporate Bitcoin treasuries and give regulators a hard stop if volatility spikes.
3. menu. Eligible assets will be limited to the top 20 coins by market capitalization based on semi-annual disclosures related to South Korea’s five major exchanges. The inclusion of dollar stablecoins like USDT and USDC is still being discussed.

There are also market structure guardrails.

Regulators are requiring exchanges to adopt standards around order types, such as expectations for split execution and limits on orders above certain price ranges, according to the report. The goal is to reduce sudden liquidity shocks after a firm enters.

If you’re looking for the moment when this moves from a “policy intent” to something tradable, the Jan. 6 task force share is key.

This indicates that FSC has moved past the vibe phase and into the “Here are the controls, here are the scopes” phase. The report also suggests hope that corporate transactions could be allowed before the end of the year.

Why this matters for Bitcoin liquidity despite being handcuffed

Virtual currency transactions in South Korea have long been centered around retail trade, and the market has developed customs around it. Think explosive momentum, crowded alternative rotations, and sharp emotional reversals.

The report claims that corporate participation could help cool the atmosphere at casinos by introducing risk teams, committees and longer time periods.

Whether that optimism materializes or not, the impact on liquidity is real. Corporate flows behave differently than personal flows.

Retail traders sell for reasons such as boredom, fear, euphoria, or overleverage.

The treasury desk sells when policy limits are reached, the quarter ends, the board of directors requests cash, or the risk management department determines the position is excessive.

Those drivers appear on the charts in a slower, chunkier manner. Therefore, order books for major stocks such as BTC and ETH tend to become thicker.

There are illustrations that are useful for reporting on South Korea.

Pointing to Naver, which reportedly has around 27 trillion won in equity, the 5% allocation would be large enough to buy more than 10,000 BTC at the local reference price.

It’s not a prediction. This is a size check and highlights why even a “small” cap can still lead to meaningful spot demand if large companies participate.

The back side is just as important.

If a corporation is permitted to enter, a corporation is also permitted to exit.

South Korea has effectively built a two-way ramp on its balance sheet, which could become a new source of supply in times of stress. Guardrails around asset eligibility and execution appear to be designed to keep that supply from punching through the thin books.

In the big picture, South Korea is trying to modernize the market’s plumbing.

It is tempting to see this as the story of a single cryptocurrency. This is more appropriate as part of a broader capital markets push.

South Korea also announced plans to open its foreign exchange market to 24-hour trading from July 2026. The move is tied to broader efforts to improve market access and win MSCI developed market upgrades, Reuters said.

The government is essentially saying it wants global capital to move in and out of won assets with less friction.

This macro goal sits alongside policies to make the domestic cryptocurrency market deeper and more institutionally ready.

It also explains why opening a cryptocurrency comes with so many restrictions.

South Korea wants more participation, and wants to do so on South Korean terms within the limits of regulators.

FSC has been laying the foundations for this approach for some time.

In a February 2025 release on corporate participation, the committee described the establishment of a task force with the FSS, the Korean Bankers Federation, and DAXA. According to an FSC press release, it has also developed plans for internal control standards and guidelines for companies to enter.

The January 2026 draft appears to be a continuation of that plan, with the investor community moving from theory to operational rules.

Next thing to note. Because small details determine market impact

If you care about BTC liquidity, this article is about the final range, not the headline.

Four details will tell us whether this will be a solid bid or a cautious pilot that the market won’t be talking about anytime soon.

1. Which companies are considered eligible?and how difficult it is to become a “professional investor.” If the list is biased toward advanced financial management, the flow of funds should be more stable. If it spreads rapidly, expect more uneven behavior.
2. How the Top 20 Universe is calculated and applied. The report is tied to semi-annual market capitalization disclosures across the five major exchanges, where operational details are important, especially in a fast-moving market where rankings change.
3. Handling of stable coins. If the US dollar stablecoin continues to be demonetised, the market will remain more domestically ring-fenced and corporate participation will become more Won-native. Once introduced, firms will have more ways to manage liquidity and settlement, which will tend to increase trading volumes and reduce spreads.
4. Execution rules and banking rails. The report flags guardrails such as split trading and the management of out-of-bounds orders, and it will be up to bankers to decide whether they feel frictionless or bureaucratic.

South Korea is not suddenly trying to turn all chaebols into Bitcoin whales.

They’re doing something more Korean than that. They create a framework, set limits on it, limit what can be bought, and at the same time tighten the rules for venues.

For Bitcoin, direction still matters.

A company’s balance sheet represents a type of spot flow that can change liquidity in ways that retail excitement typically cannot. The South Korean market is large enough that even carefully distributed openings can appear in the global BTC microstructure, especially during Asian hours.

The ban kept South Korean companies on the sidelines for nearly a decade.

Guidelines now being finalized suggest side hustles are no longer a plan. The next question is how many doors will actually open when the FSC releases its final document.