A South Korean finance and economics-focused think tank has issued a cautionary stance against the approval of spot crypto exchange-traded funds (ETFs) within the country.
Researcher Bo-mi Lee from the Korea Institute of Finance highlighted that global experiences with such ETFs have shown more drawbacks than benefits, potentially destabilising financial markets due to increased capital flows into volatile digital assets like Bitcoin (CRYPTO:BTC) and Ether (CRYPTO:ETH).
Lee emphasised concerns over resource allocation inefficiencies, liquidity issues, and heightened financial risks associated with these products.
The researcher urged for thorough research and robust regulatory measures before any introduction of spot crypto ETFs in South Korea, emphasising the uncertain impact on investors and financial stability.