Cryptocurrency Comment from Koreans: “It Harms the Economy”

According to experts in South Korea, spot cryptocurrency ETFs could harm the country's economy.

A financial research institution in South Korea wrote that spot cryptocurrency ETFs will do more harm than good to the country.

It poses a risk for investors

The report published by the Korean Institute of Finance said, “Allowing such tools will lead to a less efficient allocation of resources, greater risk taking due to crypto in financial markets, and a weakening of financial stability.”



Researchers stated that spot exchange-traded funds (ETFs) to be established for cryptocurrencies could attract large amounts of investment. Therefore, it is thought that the money flowing to other industries in South Korea may decrease.

The Korean Financial Institute also said that because of these investment instruments, the financial market in the country will be more vulnerable to cryptocurrency-related crises, and investors may therefore lose trust in financial regulators.

The government wants to introduce

The Korean Institute of Finance added that if the uncertainties regarding cryptocurrencies to be used as underlying assets in spot ETFs are resolved, they can still be good stores of value.

Unlike the US, there are no spot ETFs for cryptocurrencies in South Korea. However, the government continues its work to establish them.