Hong Kong’s Cryptocurrency ETF Approval and South Korea Falling Behind in Global Financial Competition

The Hong Kong financial authorities have approved Bitcoin and Ethereum spot Exchange-Traded Funds (ETFs) as the first in Asia and the world, thereby strengthening their competitiveness in the global financial market. This move is part of Hong Kong’s continuous push for financial innovation and solidifies its role as a financial hub while establishing leadership in the cryptocurrency market.

In contrast, the situation in South Korea is quite different. The country exhibits a considerably conservative attitude towards financial innovation and has shown a passive approach to approving cryptocurrency ETFs. This disparity stems from a lack of institutional support and decisiveness in policy-making. In South Korea, political and legal controversies surrounding the introduction of Bitcoin spot ETFs continue, partly due to the lack of a consistent policy direction between the Financial Services Commission and the government. Even major political parties like the Democratic Party of Korea, which have pledged to introduce cryptocurrency ETFs, exhibit a passive attitude in establishing the necessary legal and institutional frameworks.

Following the Umbrella Revolution, Hong Kong has actively pursued investments and policies in the cryptocurrency industry to overcome the crisis of capital flight from its financial markets and to reaffirm its position as one of the global top three financial hubs. Especially with the support of the Chinese government, Hong Kong has approved cryptocurrency ETFs, enhancing its competitiveness in the international financial market.

As a result, South Korea is not leading in financial innovation like Hong Kong but is lagging in global trends. Significant financial innovations such as the approval of cryptocurrency ETFs also need to be implemented in South Korea, and for this, the government and financial authorities must adopt more proactive and consistent policies. To keep up with advanced financial nations and not fall behind, South Korea needs to benchmark Hong Kong and accelerate its financial innovation, as calls for such measures are growing louder.