South Korea, a thriving crypto market, has chosen a president, Lee Jae-myung, who will promote a Korean won stablecoin and crypto ETFs.
As a core member of the Democratic Party, Lee Jae-myung lost to Yoon Seok-yeol in the 2022 presidential election. At that time, he made cryptocurrency policy an important political point, trying to attract the support of young people and retail investors. However, two consecutive election failures once made him labeled as the eternal candidate.
Until that day. In December 2024, the political situation in South Korea suddenly changed. The then President Yoon Seok-yeol was impeached quickly under the dual pressure of public opinion and Congress for attempting to declare martial law, which triggered a constitutional crisis. This crisis not only made the presidential throne vacant two years ahead of schedule, but also broke the original balance of power, unexpectedly creating an opportunity for Lee Jae-myung, a politician who had repeatedly failed and fought, to take power.
But when the power structure collapsed and the National Assembly fell into turmoil, Lee Jae-myung quickly seized the opportunity. He summoned members of the National Assembly to enter the hall, launched a live broadcast, and climbed over the wall to enter the National Assembly with the support of the people.
From that day on, Lee Jae-myung became a more suitable presidential candidate in the hearts of Koreans. I must let as many citizens as possible know about this as soon as possible. He called on the public to witness the process of the National Assembly overturning the martial law order in person during the live broadcast.
Finally, in the presidential by-election announced last night, Lee Jae-myung won 49.2% of the votes, ahead of his opponent Kim Moon-soo (36.8%), and was successfully elected as the 21st president of South Korea. For his supporters, this was a victory that they had to win no matter what and a battle to justify their reputation after running for election three times.
For the Korean crypto industry, Lee Jae-myungs victory may have a more far-reaching significance: he is not only a political winner, but also one of the most determined advocates of crypto policy. His election marks a fundamental institutional shift in South Koreas digital asset regulation.
Lee Jae-myungs Commitment to Encryption in South Korea
Long before taking office, Lee Jae-myung put forward a series of clear digital asset policy proposals during his campaign.
He positioned virtual assets as a key part of the countrys financial reform and included them in the presidential commitment system for the first time. The goal is to reshape the legitimacy and security of the crypto market through top-level institutional design.
The core contents of Lee Jae-myungs commitment to the South Korean confidential industry include:
1. Promote the legalization of virtual asset spot ETFs;
2. Guide the massive Korean National Pension Fund (about $884 billion) to allocate crypto assets;
3. Build a stablecoin system anchored by the Korean won as a strategic tool to prevent capital outflow and strengthen the financial sovereignty of the local currency.
Among them, the most eye-catching is his persistent advocacy of the Korean won stablecoin. In a YouTube live broadcast, Lee Jae-myung publicly stated: In order to prevent the outflow of national wealth, it is necessary to establish a stable currency market based on the Korean won. This statement not only reflects his keen insight into the international competitive landscape of digital assets, but also directly responds to the regulators concerns about the increasing share of US dollar stablecoins such as Tether (USDT) and USD Coin (USDC) in domestic transactions in South Korea.
According to data from the Bank of Korea, the transaction volume of stablecoins pegged to the US dollar reached 57 trillion won in the first quarter of 2025 alone, accounting for more than half of the total stablecoin transactions.
To achieve these goals, Lee Jae-myung plans to government-led rectification of the market, reduction of fees, and establishment of a comprehensive regulatory system and promote the establishment of a special Digital Asset Regulatory Bureau. The core idea is to provide ordinary investors with a safer trading environment through official leadership and promote the transformation of encrypted assets from speculative tools to asset allocation options.
This is not the first time that Lee Jae-myung has spoken out in the field of digital finance. As early as 2021, he advocated postponing the virtual asset income tax originally scheduled for 2022, emphasizing that regulation comes first, and taxation comes later. He also proposed to significantly increase the tax threshold from 2.5 million won to 50 million won, which is the same as stock investment, and allow loss deductions to reduce the burden on retail investors and improve policy fairness.
Today, this policy roadmap centered on ETFs, stablecoins, and regulatory systems is no longer a campaign slogan, but is gradually being transformed into specific proposals as Lee Jae-myung takes office. For the Korean crypto industry, this may mean a new stage of development - from the edge of the financial system to the core of the system.
If Luna collapses in one day, will it be considered stable in ten years?
However, Lee Jae-myung’s plan to vigorously promote the Korean won stablecoin is not without controversy.
Shortly after he proposed building a local won stablecoin market, Lee Joon-seok, the presidential candidate of the New Reform Party, launched a fierce attack on social media. He wrote: Candidate Lee Jae-myungs economic views are always dangerous and experimental. He rashly throws out untested ideas, obviously does not understand the market, and is just repeating empty slogans.
Lee Joon-seok specifically mentioned the Terra/Luna incident that shocked the world - a stablecoin project that claimed to be pegged to the Korean won but relied on algorithms to maintain prices. The collapse of the project caused hundreds of thousands of investors to lose all their money, casting a huge shadow on the term stablecoin in the minds of the Korean public and becoming the main breakthrough for the conservative camp to attack Lee Jae-myungs policies. Lee Joon-seok accused Lee Jae-myung of repeating the same mistakes and using national credit to endorse an illusory structure.
In response, the Democratic Party quickly fought back. Former congressman Kim Byung-wook publicly stated: To completely deny the Korean won stablecoin based solely on the Terra and Luna incidents is obviously contrary to the international regulatory trend. He explained: Major regulatory agencies such as the United States, Europe, and Japan have clearly excluded algorithmic stablecoins (such as Terra/Luna) from the scope of compliant stablecoins, believing that their volatility is too high to be a reliable means of storing value.
Kim Byung-wook emphasized that a truly compliant stablecoin should adopt a 1:1 full collateral model, that is, fully guaranteed by safe assets such as cash or short-term government bonds, disclose the status of reserves in real time and assume immediate redemption obligations. He pointed out that the current mainstream Tether (USDT) and others belong to this category. In contrast, Lee Joon-seoks one-size-fits-all negative attitude towards all stablecoins exposes his deviation in understanding the global crypto regulatory framework.
Another Democratic Party lawmaker, Min Byung-deok, responded even more ironically: It would be ridiculous to eliminate the entire printing technology because a photocopier broke down. He compared stablecoins to a stage in the development of financial technology, emphasizing that their development should be regulated through institutionalized supervision rather than a blanket ban due to individual failure cases.
South Koreas crypto ecosystem enters a new cycle of nationalization
Against the backdrop of Lee Jae-myung’s victory, South Korea’s crypto industry is quietly entering a new policy-driven cycle.
Unlike the past period of grassroots growth and each platform fighting on its own, todays market is more like a game of reshuffle around institutional dividends.
South Korea is already one of the most active cryptocurrency markets in the world. According to statistics from the Financial Intelligence Service (FIU) of South Korea, by the end of 2024, the number of crypto investors who have completed real-name authentication has reached 9.7 million, a year-on-year increase of 25%. It is particularly noteworthy that the number of investors aged 30 to 50 has increased significantly. Among the high-net-worth group with a currency value of more than 100 million won, people over 40 years old account for about 78%. This structural change shows that crypto assets are gradually getting rid of the stereotype of speculative tools for young people and becoming part of the asset allocation of the middle class and above.
At the same time, the Korean crypto trading market showed explosive growth in 2025, with the total trading market value exceeding 100 trillion won, even surpassing the trading volume of the domestic stock market. This round of growth is stimulated by the expectation of domestic policy easing and is also related to the global political and economic situation. Especially in the context of Trumps re-election as US president triggering risk aversion of US dollar assets, local Korean investors have poured into the virtual asset market denominated in Korean won, forming a regional capital repatriation trend.
In the face of the active market, supervision is also gradually following up. The government has announced that the virtual asset transfer income tax originally scheduled for 2025 will be postponed to 2027, citing the reasons that the technology is not yet mature and the investor protection system is still incomplete. This move effectively calmed market sentiment and bought buffer time for the new regulatory framework promoted by Lee Jae-myung.
But postponing taxation does not mean relaxing regulation. The Virtual Asset User Protection Act (VAUPA), which was introduced in 2024, has officially come into effect, imposing stricter compliance requirements on trading platforms, including asset custody mechanisms, insider trading prevention and control, user asset separation management and other core contents. The governments intention is clear: through a more sound institutional design, it will prevent the recurrence of the Terra/Luna-style trust crisis and lay the foundation for the regularization of the crypto market.
This series of policy signals conveys a clear message: the South Korean government is committed to incorporating crypto assets into the national financial governance system and promoting the markets transformation from laissez-faire to nationalized institutional embedding. This is exactly the vision described by Lee Jae-myung - a digital asset market guided by the government, guaranteed by rules, and driven by innovation.
In the future, South Koreas crypto policy may not be smooth sailing. The controversy over stablecoins, the implementation of taxation, and the coordination of international supervision are still there. But what is certain is that during Lee Jae-myungs administration, cryptocurrency is no longer a gray area that is avoided, but is written into the national strategy promised by the president. South Koreas crypto industry has finally waited for an institutionalized starting point.
