One of the leading financial institutions in South Korea – Kookmin Bank (KB) – intends to offer cryptocurrency exchange-traded funds (ETFs) and futures products to retail investors. If successful, it will become the first local bank to do so.
First Crypto ETFs in South Korea
Cryptocurrency exchange-traded funds (ETFs) are financial instruments that track the value of a particular asset or a collection of assets. These products allow investors to diversify their holdings without actually owning any of the tokens.
Many such ETFs are already live in Canada, Europe, and Brazil. The USA joined the club in October 2021 when the ProShares Bitcoin Strategy futures-backed ETF, ticked BITO, started trading on the New York Stock Exchange (NYSE).
According to a recent announcement, South Korea could become the next country on that list since Kookmin Bank revealed plans to launch such a financial tool. The institution formed a unit called the “Digital Asset Management Preparatory Committee” to work towards that goal.
The bank vowed to roll out a product consisting of digital asset ETFs and a crypto-themed equity fund. Honggun Kim – KB’s Head of Index Quant Management – confirmed the news:
“We will launch a virtual asset-themed equity fund, etc. We plan to publish periodicals as well.”
Currently, the South Korean government does not allow local banks to offer cryptocurrency trading services directly. On the other hand, financial organizations are able to provide indirect digital asset opportunities through partnerships with exchanges.
South Korea Should Embrace Crypto
It is safe to say that the Asian nation is one of the global leaders speaking of technology and digitization. Over the last several months, bitcoin and the alternative coins have attracted many local investors, while the NFT universe inside South Korea’s borders is thriving as well.
With that being said, Sohn Byung-doo – CEO of Korea Exchange (KRX) – opined that the country should further embrace the industry. He estimated that around five million locals are digital asset investors, while the daily trade volume in the state’s crypto market has rapidly increased.
At the same time, the executive urged for comprehensive regulation on the market. Such legislation would grant more investor protection and transaction support:
“Now is the time for exchanges to compete directly with overseas exchanges.”
Featured Image Courtesy of Trenasia
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