Bitcoin liquidity is about to get crunched by a new Korean law that legally excludes 99% of buyers
On paper, South Korea has been one of the world’s loudest crypto markets for years. In follow, it has been a unusually slender one.
If you have been a common particular person, you could possibly commerce on the large gained exchanges. If you have been a firm with money on the stability sheet, you principally sat in your arms.
That is lastly beginning to change.
This week, Seoul Economic Daily reported that the Financial Services Commission shared a draft set of “listed firm digital asset buying and selling pointers” with an industry-government activity pressure on Jan. 6. Regulators are aiming to publish a closing model in January or February.
The sensible headline is easy. Listed corporations and registered skilled investor companies can be allowed to make investments company funds into crypto once more, after a ban that dates again to 2017.
The human model is messier, and extra attention-grabbing.
If you run treasury for a Korean enterprise, crypto has been one thing you could possibly watch, analysis, and construct round. But you could possibly not likely contact it at dwelling with out turning banking relationships into a compliance headache.
Korea’s regulators didn’t write “no” into one neat law for each company commerce. Instead, they leaned on banks and “actual title” account gatekeeping.
The end result appeared the identical. Corporate cash stayed out.
Now, the rules describe a managed door opening.
What adjustments, and who will get to purchase
The draft framework is constructed round three huge constraints.
- The buyers.
The entities explicitly named are listed corporations {and professional} investor companies. That means companies that meet registration requirements beneath Korea’s capital markets framework, not small companies opening an change account on a whim. The quantity being mentioned is roughly 3,500 corporates that may qualify. - The measurement.
The reported restrict is an annual “deposit,” or funding cap, of up to 5% of a firm’s fairness capital. That is conservative by design. It retains the primary wave from turning into a nationwide company Bitcoin treasury dash, and it offers regulators a onerous cease if volatility spikes. - The menu. Eligible property can be restricted to cash within the prime 20 by market cap, based mostly on semiannual disclosures tied to Korea’s 5 main exchanges. The inclusion of greenback stablecoins like USDT and USDC is nonetheless being debated.
There are market construction guardrails, too.
The report says regulators need exchanges to undertake requirements round order sorts, together with expectations for cut up execution and limits on orders that exceed sure value ranges. The aim is to cut back sudden liquidity shocks as soon as corporates arrive.
If you might be on the lookout for the second this shifts from “coverage intent” into one thing you may commerce on, that Jan. 6 activity pressure sharing issues.
It alerts the FSC is previous the vibes part and into the “listed here are the controls, right here is the scope” part. The report additionally flags an expectation that company buying and selling might be allowed throughout the 12 months.
Why this issues for Bitcoin liquidity, even with {the handcuffs} on
Korean crypto buying and selling has been retail-heavy for therefore lengthy that the market developed habits round it. Think bursts of momentum, crowded alt rotations, and sharp sentiment flips.
The reporting argues company participation may assist cool the on line casino vibe by bringing in threat groups, committees, and longer time horizons.
Whether that optimism performs out or not, the liquidity impression is actual. Corporate stream behaves in another way than particular person stream.
A retail dealer sells as a result of they’re bored, scared, euphoric, or overlevered.
A treasury desk sells as a result of a coverage restrict is hit, a quarter closes, a board asks for money, or threat management says the place is outsized.
Those drivers present up on charts in slower, chunkier methods. That tends to thicken order books in majors like BTC and ETH.
There is a helpful illustration within the Korean protection.
It factors to Naver, reported to have about 27 trillion gained in fairness capital, and notes that a 5% allocation can be sufficiently big to purchase greater than 10,000 BTC at native reference costs.
That is not a prediction. It is a scale verify, and it underlines why even a “small” cap can nonetheless translate into significant spot demand if giant companies take part.
The flip facet is simply as necessary.
If corporates are allowed in, corporates are allowed out.
Korea is successfully constructing a two-way ramp for stability sheets, and that can grow to be a new supply of provide throughout stress. The guardrails round asset eligibility and execution look designed to hold that provide from punching holes in skinny books.
The larger image, Korea is attempting to modernize its market plumbing
It is tempting to view this as a single crypto story. It suits higher as half of a broader capital markets push.
South Korea has additionally introduced plans to open its international change market to 24-hour buying and selling beginning in July 2026. The transfer is tied to a wider effort to enhance market entry and win an MSCI developed-market improve, in accordance to Reuters.
The authorities is mainly saying it needs world capital to transfer out and in of gained property with fewer frictions.
That macro aim sits comfortably subsequent to a coverage that makes home crypto markets deeper and extra institution-ready.
It additionally explains why the crypto opening comes with so many constraints.
Korea needs extra participation, and it needs it on Korea’s phrases, inside a compliance perimeter regulators can defend.
The FSC has been laying groundwork for this method for a whereas.
In a February 2025 launch on company participation, the fee described organising a activity pressure with the FSS, the Korea Federation of Banks, and DAXA. It additionally laid out plans for inside management requirements and pointers for company entry, in accordance to an FSC press release.
The Jan. 2026 draft seems just like the continuation of that plan, with the investor universe shifting from concept into operational guidelines.
What to watch subsequent, as a result of the wonderful print will determine the market impression
If you care about BTC liquidity, this story is much less about a headline and extra about the ultimate scope.
Four particulars will inform you whether or not this turns into a regular bid, or a cautious pilot that markets will rapidly cease speaking about.
- Which corporates depend as eligible, and the way strict the “skilled investor” gate is in follow. If the listing skews towards refined treasury administration, flows ought to be steadier. If it broadens quick, count on extra uneven habits.
- How the top-20 universe is calculated and enforced. The reporting ties it to semiannual market cap disclosures throughout the 5 main exchanges, and the operational element will matter, particularly in fast-moving markets the place rankings shift.
- Stablecoin remedy. If USD stablecoins keep out, the market stays extra domestically ring-fenced, and company participation can be extra KRW-native. If they arrive in, you improve the quantity of methods corporates can handle liquidity and settlement, which tends to elevate buying and selling quantity and tighten spreads.
- Execution guidelines and banking rails. The report flags guardrails like cut up buying and selling and controls on out-of-range orders, and the banking layer will determine whether or not this feels frictionless or bureaucratic.
Korea is not immediately turning each chaebol into a Bitcoin whale.
It is doing one thing extra Korean than that. It is creating a framework, placing a cap on it, limiting what will be purchased, and tightening the principles of the venue on the identical time.
For Bitcoin, the route of journey nonetheless issues.
Corporate stability sheets signify the type of spot stream that can change liquidity in a manner retail pleasure normally can not. Korea’s market is giant sufficient that even a fastidiously rationed opening can present up in world BTC microstructure, particularly throughout Asia hours.
The ban stored company Korea on the sidelines for shut to a decade.
The pointers being finalized now counsel the sidelines are now not the plan. The subsequent query is how broad the door really opens when the FSC publishes the ultimate textual content.
The publish Bitcoin liquidity is about to get crunched by a new Korean law that legally excludes 99% of buyers appeared first on CryptoSlate.
