South Korea’s financial research institution said in its latest report that the introduction of spot crypto exchange-traded funds will likely result in more troubles than benefits for the country’s economy.
The local think tank explained that crypto ETFs may lead the crypto market to intercept a large amount of cash flows for the local financial market, which could mean a lesser amount of investment for local industries. KIF added that this could make the local financial market more vulnerable to crises in the crypto sector, potentially leading to increased investor distrust in the market and regulators.
South Korean regulators currently do not allow the issuance or trading of spot crypto ETFs, on the basis that bitcoin and other cryptocurrencies cannot serve as underlying assets for such investment vehicles.