On May 13, South Korea's Democratic Party leader Lee Jae-myung proposed creating a stablecoin tied to the Korean won. The goal is to prevent capital outflows and strengthen national financial sovereignty. This initiative aims to reduce reliance on foreign stablecoins like USDT and USDC.
Lee Jae-myung argued that a won-based stablecoin would allow South Korea to retain wealth domestically. Crypto exchanges in the country recorded 56.8 trillion won ($40.8 billion) in asset outflows between January and March, with nearly half linked to foreign stablecoins. Current South Korean law prohibits the issuance of domestic stablecoins.
The proposal is part of a broader digital asset strategy that includes legalizing spot crypto ETFs. On May 13, the Democratic Party also launched a Digital Asset Committee to develop cryptocurrency policies and address stablecoin regulation. The Democratic Party is set to introduce the Digital Asset Basic Act, requiring issuers to hold at least 50 billion won in reserves and gain approval from the FSC.
Economists like Shin Bo-sung have raised concerns that stablecoins could inflate the money supply. They also worry that it could shift monetary control to private issuers. Lee's campaign also calls for the National Pension Fund to invest in cryptocurrencies once price stability criteria are met.
To facilitate crypto investments, Lee proposes an integrated monitoring system and lower transaction fees. This aims to make crypto more accessible under government oversight. Both Lee and rival Kim Moon-soo support the introduction of spot crypto ETFs.
This article is based on our author's analysis of materials taken from the following resource: The Korea Herald.