Regulators Suggest New Limits on Crypto Investments
The Financial Services Commission (FSC) of South Korea is finalizing new regulations that would cap crypto holdings by companies at no more than 5% of their equity capital. The measure aims to reduce financial risk while gradually reintegrating regulated institutions into the crypto market. Officials expect the final rules to be completed by February, with implementation planned before the end of 2026.
The proposal represents a significant step toward formally allowing publicly listed companies to invest in digital assets. It follows a series of incremental policy shifts that began in mid-2025, when exchanges and non-profit organizations were first permitted to sell portions of their holdings. Authorities see this move as part of a long-term, phased framework for institutional adoption.
Source: South Korea’s Financial Services Commission
Institutional Entry Could Make the Market More Liquid
Analysts suggest that institutional participation could rapidly increase liquidity for major digital assets. Even under tight restrictions, corporate capital is expected to flow primarily into established cryptocurrencies such as Bitcoin and Ethereum. Such large-scale investments could help stabilize prices and build investor confidence across the institutional landscape.
Min Jung, an associate researcher at Presto Research, said the new policy would introduce “selective but meaningful capital” into the market. She added that investors are likely to favor tokens with intrinsic value and lower volatility. Despite challenges, the gradual return of institutional funding marks a milestone in South Korea’s evolving digital asset environment.
5% Threshold to Keep Risk Under Control
The 5% cap is designed to prevent corporations from overexposing themselves to crypto market volatility. Regulators describe the measure as a balanced approach, supporting innovation while maintaining financial prudence. The rule will also require companies to clearly disclose their crypto holdings in annual financial reports.
Some financial experts have called the threshold both conservative and strategic. By limiting exposure during the initial rollout, the FSC seeks to preserve systemic stability while testing market readiness. Industry observers note that even small allocations could still enhance portfolio diversification across the corporate sector.
Debate on Stablecoin Inclusion Persists
One unresolved issue is whether stablecoins, such as Tether (USDT), will qualify as eligible assets under the new guidelines. While stablecoins play a crucial role in liquidity management, they pose unique regulatory and monetary challenges. Differences in opinion regarding systemic risk and monetary policy implications continue to delay classification.
The FSC has said it will coordinate with the Bank of Korea to determine appropriate usage criteria. Analysts predict that only U.S. dollar-backed stablecoins with verified reserves might be included. Should such tokens gain approval, more companies could legally trade digital assets within regulated limits.
Framework Extends Broader Crypto Market Reforms
The initiative builds on ongoing reforms aimed at normalizing institutional participation in digital assets. Previously, only select financial entities and charitable organizations could conduct limited crypto transactions. The revised framework opens corporate access, effectively ending South Korea’s long-standing ban on company-level crypto trading.
Regulators also plan to introduce mechanisms to curb speculation, including split-trading restrictions and daily price limits. These safeguards are intended to maintain market order while increasing liquidity. Collectively, these measures reflect the FSC’s pragmatic, phased approach to digital asset regulation.
Digital Asset Basic Act to Set Rules for the Long Term
The forthcoming Digital Asset Basic Act is expected to establish a comprehensive nationwide framework for crypto regulation. The law will likely include provisions for licensing, consumer protection, and custodial requirements for institutional investors. It is also expected to enable innovations such as stablecoin issuance and exchange-traded crypto products.
A draft version of the legislation could be finalized by the end of the first quarter of 2026. Policymakers hope it will provide clarity for both businesses and consumers navigating the growing digital economy. By aligning its rules with international standards, South Korea aims to position itself as a regulated yet competitive global crypto hub.
Stablecoin Regulation Remains the Critical Focus
Experts agree that stablecoin policy will remain the central focus of crypto regulation throughout 2026. The development of a won-denominated stablecoin could revolutionize blockchain-based payments and settlement systems. Min Jung emphasized that such innovation “could have a larger impact than any other regulatory change.”
Analysts believe a South Korea–backed stablecoin would accelerate adoption of blockchain transactions and promote seamless integration between financial institutions and decentralized platforms. As regulations mature, the country appears poised to shift from cautious oversight to structured innovation—ushering in a new phase of digital financial growth.
