Korean think tank KIF: Cryptocurrency spot ETFs are more harmful than beneficial to the national economy

ChainCatcher news, according to The Block, a South Korean financial research institution stated in its latest report that the introduction of cryptocurrency spot ETFs may bring more trouble than benefits to the country's economy.

The Korea Institute of Finance (KIF) mentioned in a report last Sunday: "Allowing such products may lead to side effects, such as inefficient resource allocation, increased risks associated with cryptocurrencies in the financial market, and weakened financial stability."

The institution explained that crypto ETFs could intercept a significant amount of cash flow from the local financial market to the crypto market, resulting in reduced investment in the local industry. KIF added that this could make the local financial market more susceptible to crises in the crypto industry, leading to increased distrust among investors towards the market and regulators.