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South Korea’s Financial Services Commission (FSC) is deliberating revising its stance on spot Bitcoin ETFs (exchange-traded funds), handing over the consideration to a crypto advisory committee. If approved, the financial instrument could position South Korea alongside a growing list of countries dealing with these investment products. It would also significantly expand the country’s digital asset investment market, as is happening in the US. South Korea Deliberates Spot Bitcoin ETF Approvals Local media reported that South Korea’s FSC is considering allowing spot Bitcoin ETFs and has established a virtual asset committee. The revelation came during the National Assembly State Affairs Committee audit session on Thursday. The advisory committee will policies around evaluating digital assets and consult extensively before a possible approval. A positive decision from this virtual asset committee would see South Korea’s strict stance on investment products such as spot Bitcoin ETFs revised. In June, the Korea Institute of Finance (KIF) expressed concerns months after the US SEC approved spot Bitcoin ETFs in the country. Specifically, the KIF highlighted significant risks associated with introducing such financial products into South Korea’s economy. Among them, it cited the potential for “increased inefficiency in resource allocation.” Read more: How To Trade a Bitcoin ETF: A Step-by-Step Approach. It also mentioned greater financial instability associated with connecting the country’s local market to the volatile crypto sector through the spot Bitcoin ETFs. The KIF warned that such financial instruments would pull investors’ focus away from traditional industries, diverting capital and potentially slowing down South Korea’s growth and innovation. “Allowing [such] products can lead to side effects such as increased inefficiency in resource allocation, increased exposure to crypto-related risks in the financial market, and weakened financial stability,” a paragraph in the report read. Nevertheless, the US market continues to record growing institutional interest driven by spot crypto ETFs as…

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Filed under: News - @ October 10, 2024 10:23 pm