South Korea to Cap Corporate Crypto Holdings at 5% Equity

Source: CryptoNewsNet Original Title: South Korea crypto bulls face make-or-break test at 5% cap Original Link: South Korea’s Financial Services Commission (FSC) is planning to limit corporate and professional investor cryptocurrency holdings to 5% of equity capital annually.

Under the draft guidelines, corporations would be permitted to invest in the top 20 cryptocurrencies by market capitalization. The inclusion of U.S. dollar-pegged stablecoins such as USDT remains under discussion.

Timeline and Implementation

Finalized rules are expected between January and February, with corporate trading anticipated later this year. The proposed framework will also establish price limits and split trading rules designed to mitigate volatility as corporate participation increases.

Market Impact Analysis

The cap is likely to improve liquidity but will concentrate flows in Bitcoin (BTC) and potentially Ethereum, with limited impact on smaller altcoins, according to analysts. The 5% limit may not pose a significant constraint, as most companies are unlikely to exceed it in the initial stages.

Broader Regulatory Framework

Market participants are monitoring the country’s upcoming Digital Asset Basic Act, expected in the first quarter. The legislation will formalize regulations for won-pegged stablecoins and introduce the nation’s first spot crypto exchange-traded funds.

Stablecoin rules are viewed as particularly influential for South Korea’s broader crypto ecosystem. The FSC’s measures reflect a cautious approach to expanding institutional crypto access while safeguarding market stability amid growing corporate interest.