South Korea is facing an important presidential election on June 3rd to choose Yoon Suk-yeol's successor. Similar to the United States, approximately 15 million cryptocurrency investors, representing at least 30% of the population, have become a crucial voting bloc.
With this in mind, presidential candidates are strengthening their digital asset policy proposals to attract young, tech-savvy voters. The appeal is becoming even stronger as demand for regulated investment products and financial inclusion increases.
Korean Election Candidates Target Coin Investors
According to local media, Lee Jae-myung from the Democratic Party and Kim Moon-soo from the People Power Party are leading with crypto-friendly platforms.
Both candidates are reportedly promising to legalize physical cryptocurrency ETFs, which are currently prohibited under Korean law. These financial products allow investors to gain exposure to Bitcoin and other digital assets through traditional stock markets.
"All three major presidential candidates in Korea support Bitcoin ETFs and institutional investment. Currently, Bitcoin ETFs and institutional investment are banned in Korea. 100% of trading volume comes from individual investors." – Ju Ki-young, CEO of CryptoQuant
According to the Korea Herald, Lee Jae-myung is differentiating his campaign with a proposal to develop a won-based stablecoin market. The candidate aims to reduce dependence on foreign stablecoins like USDT and USDC and curb capital outflows.
"We must build a won-based stablecoin market to prevent national wealth from flowing overseas." – Lee Jae-myung, during a policy discussion with economic content creators
Currently, South Korea prohibits domestic stablecoin issuance. However, Lee's plan will introduce a regulatory pathway under the upcoming Digital Assets Basic Law.
The proposed bill, expected to be tabled this week, will address the legal status, issuance, and distribution of digital assets. Stablecoin issuers will also need to register with the Financial Services Commission (FSC) and maintain a minimum reserve of 50 billion won.
Reports indicate that domestic cryptocurrency exchanges recorded 56.8 trillion won ($40.8 million) in outflows from January to March. Nearly half of this was related to US dollar-based stablecoins.
Critics, however, warn of potential macroeconomic risks, noting the privilege of money creation is being granted to the private sector.
"Stablecoins are essentially another form of banking that creates money out of nothing." – Shin Bo-sung, Senior Researcher at the Korea Capital Market Institute
Bold Crypto ETF... Stablecoin Proposal
Institutional adoption is also gaining attention. Lee Jae-myung's team is reportedly proposing that large players like the National Pension could invest in digital assets once price stability criteria are met.
These initiatives align with the government's broader efforts to lift current prohibitions on corporate cryptocurrency investments and integrate digital assets into the capital market. Lee Geun-joo, Chairman of the Korea Fintech Industry Association, supports the ETF push.
"A Bitcoin physical ETF is not just a product. It can be a gateway to broadening the connection between the digital asset ecosystem and the capital market." – Lee Geun-joo
Skepticism remains, with Konstantin Tkachuk, co-founder of Titannet DAO, noting that skepticism will persist until promises are realized.
"Sounds nice, but I won't celebrate until the proposal is documented and the actual benefits are clear." – Konstantin Tkachuk
Meanwhile, some voters are wary of superficial promises, with one user mentioning that a candidate proposing crypto-related policies gave a completely off-base and incorrect response about the difference between USDT and USDC.
"Are they just seeing Korea's cryptocurrency market as a quick cash grab to exploit and discard?" – User
Regulatory oversight is intensifying. The Financial Supervisory Service (FSS) recently reported that 52.5% of suspicious cryptocurrency transactions from July to December 2023 were related to investors in their 20s and 30s. This is precisely the demographic the financial services industry is courting.
New rules under the Virtual Asset User Protection Act could lead to criminal charges for unfair trading practices.
Elsewhere, as Korean presidential candidates show a favorable stance towards cryptocurrency, South Korea is preparing to announce the second phase of its cryptocurrency regulatory framework in the second half of 2025. The government has also forced Google to block 17 unregistered foreign cryptocurrency exchanges, indicating a firm stance on investor protection.
With opportunities and risks at stake, cryptocurrency has become a decisive issue in the Korean presidential election.
