South Korea's Financial Services Commission (FSC) is moving to cap corporate cryptocurrency holdings at 5% of equity capital, and would restrict eligible assets to the top 20 tokens by market capitalization, according to a report.
The proposal, still under internal discussion, aims to curb excessive risk-taking as more companies pour capital into digital assets. Under the planned rule, firms cannot invest in smaller, more volatile cryptocurrencies — only in blue-chip names like Bitcoin, Ethereum, and Ripple. But a key question remains: how will stablecoins be classified?
Stablecoin Rules in Limbo
Tether's USDT and Circle's USDC, both among the largest tokens by market cap, pose a definitional challenge for regulators. Pegged to fiat currencies, they behave more like cash than speculative assets. If included under the 5% cap, companies would face severe limits on using stablecoins even for treasury operations. If carved out separately, firms could park a larger share of capital in these quasi-fiat instruments. The FSC has not yet decided which path to take.
Regulatory approval for the guidelines is expected between January and early February 2026, with officials framing the move as a risk management measure to prevent excessive capital concentration in virtual assets.
Market Safeguards: Trade Splitting and Price Limits
Alongside the investment cap, the FSC will introduce market safeguards including trade-splitting rules and price fluctuation limits. These are designed to prevent manipulation and extreme volatility as institutional capital enters the space. Some industry participants worry the restrictions are too heavy-handed and could stifle innovation, but regulators prioritize financial stability. The policy also aims to control capital outflows, ensuring domestic funds do not disproportionately flow into offshore crypto markets.
South Korea's stance on crypto has evolved significantly since 2017, when it imposed a near-total ban on trading. In subsequent years, authorities gradually built a regulated framework for exchanges and investor protection. The latest proposal shows the country is no longer hostile to crypto, but remains determined to keep corporate participation on a short leash.
The FSC has also missed several legislative deadlines for a stablecoin framework, leaving policy clarity in question. As institutional interest grows, the gap between regulatory speed and capital inflows is expected to widen.