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Kookmin Bank to become the first bank in South Korea to offer a crypto ETF

Kookmin Bank to become the first bank in South Korea to offer a crypto ETF
Kookmin Bank to become the first bank in South Korea to offer a crypto ETF

Kookmin Bank, one of the leading financial institutions in South Korea, plans to issue cryptocurrency exchange-traded funds (ETFs). The bank is also planning to offer futures products to retail investors. Kookmin Bank is the first local financial institution to offer this product.

Kookmin Bank launches a crypto ETF

Crypto ETFs are financial products that track the value of an underlying asset. ETFs have become highly popular because they allow investors to diversify their portfolios while avoiding the risks of cryptocurrencies.

Cryptocurrency ETFs have already been launched in Brazil, Canada and Europe. In October 2021, the US Securities and Exchange Commission (SEC) approved a Bitcoin futures ETF. The SEC failed to approve a spot Bitcoin ETF due to the fear of market manipulation.

South Korea will be joining the list of countries with crypto ETFs. The bank has launched a division known as the “Digital Asset Management Preparatory Committee” that will enable Bitcoin ETFs.

The head of Index Quant Management at Kookmin Bank, Honggun Kim, commented on this development saying, “we will launch a virtual asset-themed equity fund, etc. We plan to publish periodicals as well.”

Local banks in South Korea are barred from offering crypto trading services directly. However, the banks can partner with digital asset exchanges to allow digital asset services indirectly.

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Crypto regulations in South Korea

South Korea has become heavily invested in technology and digitization. Cryptocurrencies have become popular among local investors. The adoption of non-fungible tokens (NFTs) has also grown.

One of the popular crypto exchanges in South Korea is Korea Exchange (KRX). The CEO of this company, Sohn Byung-doo, has said that the country needs to accommodate crypto investments. The daily trading volumes for cryptocurrencies have also grown significantly.

Byung-doo believes that the cryptocurrency sector needed to be regulated despite the growth. Regulating the sector would protect investors and ensure they do not fall prey to the risks and scams that are usually rampant. According to the executive, regulating the sector ensured that local exchanges could compete with international trading firms.

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