Seoul, South Korea - Following the June 3rd snap election, newly elected President Lee Jae-myung plans to legalize spot Bitcoin exchange-traded funds (ETFs) and launch a national KRW-backed stablecoin. This move aims to boost cryptocurrency adoption in South Korea, the fourth-largest economy in Asia. (Source: CryptoSlate, Date: June 3rd)
Lee secured the presidency with 49.4% of the vote, ending political uncertainty. His campaign included a strong focus on digital assets, promising to reverse the country's ban on crypto ETFs and create a G20-backed fiat stablecoin. The new president's immediate assumption of office, due to the snap election rules, allows for quick policy implementation.
The Financial Services Commission (FSC) has historically restricted access to overseas crypto ETFs. Lee's plan to overturn this could provide Korean brokerages and institutional investors with compliant access to digital assets by Q4 2025. The proposed "Digital Asset Basic Act" includes reserve requirements and VAT exemptions for crypto swaps.
The KRW-pegged stablecoin aims to challenge the U.S. dollar's dominance in Asian trading. Korean exchanges like Upbit and Bithumb regularly process significant daily volumes. Over 15 million South Koreans, approximately 30% of the adult population, trade crypto, making the electorate highly blockchain-savvy.
Young voters played a key role in the election, viewing crypto as a path to financial empowerment. Lee's Democratic Party now controls both the executive and legislative branches until 2028, facilitating rapid crypto-forward reforms. This follows Hong Kong's launch of spot Bitcoin and Ethereum ETFs, which quickly attracted over US$260 million in assets.
South Korea's actions may pressure Japan and Singapore to accelerate their digital asset approvals. The country, with its large trading platforms, could become a regulated crypto hub. However, the FSC's current leadership and potential institutional resistance could slow progress. Legal proceedings against Lee and potential conflicts with the Bank of Korea's CBDC pilot also pose challenges.
Despite these challenges, Lee's election represents a significant shift in how a major G20 economy views crypto. His initiatives could reshape South Korea's financial landscape and offer a regulatory model. The rest of Asia and Wall Street are closely watching this development.