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 of these ETFs already exist in Canada, Europe and Brazil. The United States joined the club in October 2021 when the ProShares Bitcoin Strategy Futures-Backed ETF, marked BITO, began trading on the New York Stock Exchange (NYSE).

According to a recent announcement, South Korea could become the next country on that list, as 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 has pledged to launch a product consisting of digital asset ETFs and a crypto-themed equity fund. Honggun Kim, Director of Index Quant Management at KB, confirmed the news:

“We will launch a virtual asset-themed stock fund, etc. We also plan to publish regular publications.”

Currently, the South Korean government does not allow local banks to offer cryptocurrency trading services directly. On the other hand, financial organizations can provide indirect digital asset opportunities through partnerships with exchanges.

South Korea should adopt cryptocurrencies

It is safe to say that the Asian nation is one of the world leaders in technology and digitization. In recent months, bitcoin and altcoins have attracted many local investors, while the NFT universe within South Korea’s borders is also thriving.

That said, Sohn Byung-doo, CEO of the Korea Exchange (KRX), was of the opinion that the country should further embrace the industry. He estimated that around five million locals are investors in digital assets, while the daily trading volume on the state’s crypto market has increased rapidly.

At the same time, the executive called for a comprehensive regulation of the market. Such legislation would grant more protection to investors and support for transactions:

“Now is the time for exchanges to compete directly with overseas exchanges.”

Featured image courtesy of Trenasia

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