South Korea’s New President Pushes for Domestic Stablecoins

South Korea's President Lee Jae-myung is swiftly acting on his campaign promises, with his Democratic Party proposing a new Digital Asset Basic Act to enable domestic stablecoin issuance.

This move aims to boost transparency and competition in the crypto sector.

The bill outlines conditions for local companies to issue stablecoins, including a minimum capital of 500 million won ($368,000) and guaranteed refunds via reserves, all requiring approval from the Financial Services Commission. This legislative push comes as stablecoin trading surges in South Korea, with $42 billion in transactions on major exchanges in Q1 alone, reflecting a vibrant crypto market where over a third of the population participates.

President Lee’s crypto vision extends further, advocating for the national pension fund to invest in Bitcoin and other cryptocurrencies, alongside legalizing Bitcoin ETFs. He stresses the need for a won-backed stablecoin to prevent “national wealth from leaking overseas.”

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However, the Bank of Korea opposes the move, with Governor Rhee Chang-yong warning that non-bank stablecoins could undermine monetary policy, suggesting the central bank should lead regulation. This caution is partly influenced by the Terra blockchain collapse in 2022, which impacted many South Korean investors.

Despite central bank reservations, the crypto push has already seen KakaoPay shares jump 45%. Yet, JPMorgan analysts caution that such rallies are “unjustifiable” given the policy’s uncertain benefits. South Korea’s crypto future remains a dynamic interplay between ambitious policy and regulatory caution.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.