South Korea’s ruling party backed off the election promise of a Bitcoin ETF

South Korea's ruling People's Power Party has indefinitely delayed a proposal to ease cryptocurrency restrictions, including lifting a ban on Bitcoin (BTC) exchange-traded funds (ETFs), according to local sources.

According to a report by local media Chosun Biz, the cancellation of the party's pledges may be linked to challenges with government and financial authorities over cryptocurrency policies.

Earlier this month, there were reports that the ruling party was making election promises to delay the tax on crypto profits and allow local institutions to introduce Bitcoin ETFs and invest directly in cryptocurrencies.

The People Power Party has reportedly dropped virtual assets from its policy priorities, as the party led by Jun Chang-hyun planned to announce a virtual asset pledge last week, but postponed it indefinitely.

In January, the country's financial regulator barred financial institutions from promoting cryptocurrency ETFs and reiterated the ban, saying digital assets do not match the basic assets defined in the Capital Markets Act. While domestic investors currently face limitations in investing in spot crypto ETFs, foreign crypto futures remain accessible.

Although the spot Bitcoin ETF was recently approved by the United States Securities and Exchange Commission, South Korea's Financial Services Commission takes a cautious stance, citing investment risks associated with digital assets.

Meanwhile, the opposition Democratic Party, which reportedly made similar promises regarding crypto ETFs, publicly announced its crypto campaign promises last week. South Korea's general election is expected on April 10.

Related: South Korean government implements digital system to track crypto tax evaders

According to a local report, The People Power Party has considered a proposal to delay taxes on virtual assets for two years and allow corporate investments in digital assets. However, this plan has not been finalized due to insufficient consultation with relevant ministries and concerns about potential losses, especially corporate involvement in digital assets.

South Korea's Financial Supervisory Service (FSS), the country's main financial regulator, is set to request guidance from the US SEC regarding bitcoin-exchange-traded funds.

FSS chief Lee Bok-hyun outlined the 2024 business plan, including visiting key financial markets such as New York in Q2. The agenda includes discussions on South Korean financial markets with a focus on spot Bitcoin ETFs.

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