South Korea breaks a 9-year corporate crypto ban, with trillions of dollars poised to flow in, but the 5% investment cap sparks controversy

The Financial Services Commission (FSC) of South Korea has finalized guidelines that allow listed companies and professional investors to trade cryptocurrencies, officially ending a nine-year ban on corporate crypto investments. This policy shift marks Korea’s transition from strict regulation to institutional adoption, but the relatively conservative investment cap has also sparked industry discussions.

End of Ban, Large Market Access Scale

Eligible companies can invest up to 5% of their equity annually in the top 20 cryptocurrencies by market capitalization on Korea’s five major exchanges. This policy will benefit approximately 3,500 entities, including listed companies and registered professional investment institutions, potentially releasing trillions of Korean won into the crypto market.

The FSC plans to publish the final guidelines in January-February, with corporate trading expected to officially commence by the end of the year. This is not only a policy breakthrough but also marks the formal legal channel for institutional capital to enter Korea’s crypto market.

International Comparison: Why Does Korea Seem “Conservative”

The industry’s main criticism of this policy is the 5% investment limit. According to news reports, the US, Japan, Hong Kong, and the EU do not impose similar proportional restrictions on corporate crypto holdings.

This difference raises a concern: Korea may find it difficult to develop digital asset treasury companies similar to Japan’s Metaplanet. Metaplanet continuously purchases Bitcoin as part of its treasury strategy, but the 5% cap clearly limits the space for such innovative business models.

Broader Strategic Framework

This policy is not an isolated move. According to related information, Korea is advancing a more comprehensive digital asset strategy:

• Bitcoin spot ETF: planned for 2026, following the US and Hong Kong
• Stablecoin legislation: regulatory framework to be completed before Q1, requiring 100% reserve backing
• Blockchain treasury payments: aiming to transfer 25% of fiscal operations to blockchain by 2030

This indicates Korea’s policy shift is not just about allowing corporate investments but about building a complete digital asset ecosystem.

Market Potential and Practical Constraints

Releasing trillions of Korean won sounds substantial, but the 5% cap is actually a balancing act: it provides market access while preventing excessive concentration. This “step-by-step” approach offers greater policy stability but also means that large-scale corporate shifts into crypto assets are unlikely in the short term.

From an investor perspective, the most immediate beneficiaries of this policy will be the top 20 cryptocurrencies by market cap on Korea’s five major exchanges. The entry of institutional capital typically enhances market liquidity and pricing efficiency.

Summary

South Korea’s end of a nine-year corporate crypto ban marks an important policy turning point, but it is not a “radical” decision. The 5% investment cap is relatively conservative, reflecting Korea’s cautious attitude toward advancing its digital asset strategy. What is truly noteworthy is that this policy is just part of Korea’s broader digital asset strategy, including ETFs, stablecoin legislation, and blockchain treasury payments. These initiatives collectively indicate that Korea is shifting from “prohibition” to “regulation” and from “defense” to “application.” The upcoming release of the final guidelines in 1-2 months and the official launch by year’s end will further test the implementation of this strategy.