South Korea to Lift Corporate Crypto Ban: 5% Investment Cap Set for Listed Firms in 2026

South Korea is poised to end its nine-year ban on corporate cryptocurrency investment, with the Financial Services Commission (FSC) finalizing guidelines that will allow listed companies and professional investors to trade digital assets—subject to a strict 5% cap on equity capital.

(Sources: X)

The move completes the FSC’s three-phase roadmap launched in February 2025 and is expected to open crypto market access to approximately 3,500 entities once implemented. This analyst insight examines the policy shift, investment limits, market reaction, potential impact on won-stablecoins and Bitcoin ETFs, and South Korea’s broader ambition to become a global crypto hub.

End of the 9-Year Corporate Crypto Ban

Since 2017, South Korea has prohibited corporations and banks from trading or holding cryptocurrencies, citing concerns over speculative bubbles and money-laundering risks. The ban was one of the strictest among major economies and significantly limited institutional participation during multiple bull cycles.

The FSC’s new “Virtual Currency Trading Guidelines for Listed Corporations” formally legalizes corporate crypto investment, marking the third and final phase of its liberalization plan:

• Phase 1 (early 2025): Allowed limited professional-investor access.
• Phase 2 (mid-2025): Expanded to certain institutional products.
• Phase 3 (2026 implementation): Full access for listed companies with defined limits.

Once enacted, qualifying entities may allocate up to 5% of their equity capital to the top 20 cryptocurrencies by market capitalization, traded exclusively on South Korea’s five major licensed exchanges.

Key Restrictions and Safeguards in the New Framework

The 5% equity-capital cap is the most debated element of the policy:

• Annual Deposit Limit: Total crypto exposure cannot exceed 5% of shareholders’ equity.
• Approved Assets: Restricted to top-20 coins by global market cap.
• Trading Venues: Limited to FSC-regulated domestic exchanges.
• Additional Controls: Price-range order standards to mitigate liquidity and manipulation risks.
• Stablecoin Question: Ongoing discussion on whether dollar-pegged stablecoins (e.g., USDT) will be included.

The FSC justifies the conservative limit as necessary to prevent excessive risk concentration and maintain financial stability.

Market Reaction: “Excessive” Cap Draws Criticism

Industry participants have expressed disappointment with the 5% ceiling, arguing it is far more restrictive than rules in the United States, Japan, or the European Union, where no such percentage caps exist for corporate crypto holdings.

• Criticism: “Investment limits that do not exist overseas could weaken fund inflows and prevent specialized virtual currency investment companies from emerging.”
• Missed Opportunity: Analysts believe a higher or no cap would attract more institutional capital and accelerate product innovation.
• Positive Note: The framework still represents a major liberalization and removes a long-standing structural barrier.

Expected Second-Order Effects: Won-Stablecoins and Bitcoin ETFs

The policy change is widely expected to catalyze development of won-denominated stablecoins and accelerate the launch of spot Bitcoin ETFs in South Korea.

• Won-Stablecoins: Domestic issuers are preparing to launch KRW-backed stablecoins to serve corporate payment and settlement needs.
• Bitcoin Spot ETFs: With corporate participation now permitted, demand for regulated BTC exposure is anticipated to grow rapidly.
• Timeline: Industry insiders expect first products to reach market within 12–18 months of final guidelines.

These developments would further position South Korea as one of Asia’s most progressive crypto jurisdictions.

South Korea’s Strategic Pivot: From Ban to Crypto Hub

The FSC’s liberalization aligns with broader national efforts to establish South Korea as a global crypto hub:

• September 2025: Ruling Democratic Party launched a dedicated crypto policy task force to “foster growth” in the sector.
• Ongoing: Heavy investment in blockchain infrastructure, regulatory sandboxes, and talent development.
• Context: ~16 million South Koreans (~1/3 of population) held crypto accounts as of March 2025.

The corporate ban lift completes a multi-year transition from restriction to regulated integration.

Outlook and Key Watch Points

The 5% cap—while criticized as overly conservative—is unlikely to derail South Korea’s broader crypto ambitions. Once implemented, the framework is expected to:

• Unlock significant institutional capital.
• Accelerate won-stablecoin and Bitcoin ETF development.
• Strengthen South Korea’s position in global digital finance.

Near-term risks include implementation delays, exchange compliance burdens, and potential pushback from conservative regulators. Long-term, the policy could serve as a regional model for balancing innovation with financial stability.

In summary, South Korea’s decision to lift its nine-year corporate crypto ban—while imposing a 5% equity-capital cap—represents a landmark shift toward regulated institutional participation. The move completes the FSC’s three-phase liberalization plan and is expected to catalyze won-stablecoins, Bitcoin ETFs, and deeper market integration. While industry voices argue the cap is excessive compared with U.S., Japanese, and EU standards, the overall direction signals South Korea’s intent to transition from restriction to leadership in the global crypto economy. Monitor final guideline publication and early corporate adoption for confirmation of momentum—always reference official FSC announcements and regulated sources when tracking regulatory and market developments.