As a core member of the Democratic Party, Lee Jae-myung narrowly lost to Yoon Suk-yeol in the 2022 presidential election. At that time, he made cryptocurrency policy a key campaign promise, trying to attract young people and retail investors. However, consecutive election defeats once labeled him as the "perpetual candidate".

Until that day. In December 2024, the Korean political landscape suddenly changed. President Yoon Suk-yeol was quickly impeached under public and parliamentary pressure for attempting to impose martial law, triggering a constitutional crisis. This crisis not only vacated the presidential seat two years early but also broke the existing power balance, unexpectedly creating an opportunity for Lee Jae-myung, a politician who had repeatedly fought despite defeats.

As the power structure collapsed and parliament fell into turmoil, Lee Jae-myung quickly seized the opportunity. He summoned lawmakers to the National Assembly hall, initiated a live broadcast, and climbed over the wall into the parliament under the support of the people.

From that day on, Lee Jae-myung became the more suitable presidential candidate in the hearts of Koreans. "I must let as many citizens as possible understand this situation quickly," he urged in the live broadcast, calling on people to witness the parliament's overturning of martial law.

Finally, in the presidential by-election announced last night, Lee Jae-myung led with 49.2% of the votes, ahead of his opponent Kim Moon-soo (36.8%), successfully becoming the 21st president of South Korea. For his supporters, this was a victory of "winning at all costs", a vindication after three attempts.

For the Korean crypto industry, Lee Jae-myung's victory may have even more far-reaching significance: he is not only a political winner but also one of the most steadfast advocates of crypto policy. His election marks a fundamental institutional shift in digital asset regulation in South Korea.

Lee Jae-myung's Promises to Korean Crypto

Even before taking office, Lee Jae-myung proposed a series of clear digital asset policy positions during his campaign.

He positioned virtual assets as a key component of national financial reform and for the first time incorporated them into a presidential-level promise system. His goal is to reshape the legitimacy and safety of the crypto market through top-level institutional design.

Lee Jae-myung's core promises to the "Korean crypto industry" include:

1. Promoting the legalization of virtual asset spot ETFs;

2. Guiding the massive Korean National Pension Fund (about $884 billion) to allocate crypto assets;

3. Constructing a stablecoin system anchored to the Korean won, using it as a strategic tool to prevent capital outflow and strengthen monetary financial sovereignty.

Most notably, he is persistent about the Korean won stablecoin. In a YouTube livestream, Lee Jae-myung openly stated: "To prevent national wealth from flowing out, we need to establish a stablecoin market based on the Korean won." This statement not only reflects his keen insight into the international digital asset competitive landscape but also directly responds to regulators' concerns about the increasing proportion of dollar stablecoins like Tether (USDT) and USD Coin (USDC) in Korean transactions.

According to Bank of Korea data, in the first quarter of 2025 alone, dollar-pegged stablecoin transactions reached 57 trillion won, accounting for over half of total stablecoin transactions.

To achieve these goals, Lee Jae-myung plans to "have the government lead market rectification, reduce transaction fees, and establish a comprehensive regulatory system" and promote the establishment of a dedicated "Digital Asset Regulatory Bureau". His core strategy is to provide a safer trading environment for ordinary investors through official leadership and transform crypto assets from "speculative tools" to "asset allocation options".

This is not Lee Jae-myung's first time speaking out in digital finance. As early as 2021, he advocated postponing the originally scheduled virtual asset income tax in 2022, emphasizing "regulation first, taxation later". He also proposed raising the taxation threshold from 2.5 million won to 50 million won, in line with stock investment, and allowing loss offset to reduce the burden on retail investors and enhance policy fairness.

Now, this policy roadmap centered on ETFs, stablecoins, and regulatory frameworks is no longer just a campaign slogan but is gradually being transformed into concrete proposals with Lee Jae-myung's governance. For the Korean crypto industry, this may mean entering a completely new development stage - moving from the financial system's edge to its institutional core.

Once Luna Crashes, Afraid for 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 domestic Korean won stablecoin market, the Reform Party's presidential candidate Lee Jun-seok launched a fierce attack on social media. He wrote: "Candidate Lee Jae-myung's economic views are always dangerous and experimental. He recklessly throws out untested ideas, clearly not understanding the market and merely repeating empty slogans."

Lee Jun-seok specifically mentioned the globally shocking Terra/Luna incident - a "stablecoin" project that claimed to be pegged to the Korean won but relied on algorithms to maintain its price. The project's collapse left hundreds of thousands of investors with nothing, casting a huge shadow over the term "stablecoin" in the Korean public's mind and becoming the main breakthrough point for the conservative camp to attack Lee Jae-myung's policy. Lee Jun-seok accused Lee Jae-myung of "treading the same path" and "endorsing an illusive structure with national credit".

In response, the Democratic Party quickly counterattacked. Former lawmaker Kim Byung-wook publicly stated: "Completely negating the Korean won stablecoin based solely on the Terra and Luna incident is clearly contrary to international regulatory trends." He explained: "Major regulatory bodies in the US, Europe, and Japan have explicitly excluded 'algorithmic stablecoins' (like Terra/Luna) from compliant stablecoins, believing their volatility is too high to be a reliable store of value."

Kim Byung-wook emphasized that true compliant stablecoins should adopt a "1:1 full collateralization" model, using cash or short-term government bonds as secure assets for full guarantee, real-time reserve disclosure, and immediate redemption obligations. He pointed out that current mainstream stablecoins like Tether (USDT) fall into this category. In contrast, Lee Jun-seok's blanket denial of all stablecoins exposes his misunderstanding of the global crypto regulatory framework.

Another Democratic Party lawmaker Min Byung-duk's response was even more sarcastic: "It would be ridiculous to eliminate the entire printing technique just because one copier is broken." He compared stablecoins to a stage of financial technology development, emphasizing that they should be regulated through institutionalization rather than being completely banned due to individual failure cases.

Korean Crypto Ecosystem Enters a New "Nationalization" Cycle

Against the backdrop of Lee Jae-myung's victory, the Korean crypto industry is quietly entering a new policy-driven cycle.

Unlike the previous period of wild growth and platforms fighting their own battles, today's market is more like a game being reshuffled around "institutional dividends".

South Korea has long been one of the most active cryptocurrency markets globally. According to the Financial Intelligence Unit (FIU), by the end of 2024, the number of verified crypto investors has reached 9.7 million, a year-on-year growth of 25%. Notably, investors aged 30 to 50 have shown significant growth, with those over 40 accounting for approximately 78% of high-net-worth individuals holding crypto assets worth over 100 million Korean won. This structural change indicates that crypto assets are gradually shedding the stereotype of being a "speculative tool for young people" and becoming part of asset allocation for middle and upper-class investors.

Meanwhile, the Korean crypto trading market is experiencing explosive growth in 2025, with total trading value exceeding 100 trillion Korean won, even surpassing the country's stock market trading volume. This growth is stimulated by expectations of domestic policy relaxation and global geopolitical situations. Particularly with Trump's potential re-election as US president triggering risk-averse sentiment towards US dollar assets, local Korean investors have been flooding into the virtual asset market priced in Korean won, creating a regional capital backflow trend.

Facing the market's vibrancy, regulation is gradually catching up. The government has announced postponing the originally planned virtual asset transfer tax from 2025 to 2027, citing "immature technical implementation" and "incomplete investor protection mechanisms". This move effectively calmed market sentiment and bought buffer time for Lee Jae-myung's proposed new regulatory framework.

However, postponing taxation does not mean relaxing regulation. The Virtual Asset User Protection Act (VAUPA) implemented in 2024 has officially taken effect, imposing stricter compliance requirements on trading platforms, including asset custody mechanisms, insider trading prevention, and user asset segregation management. The government's intent is clear: through more robust institutional design, prevent trust crises similar to Terra/Luna and lay the foundation for crypto market "normalization".

These policy signals clearly convey that the Korean government is committed to integrating crypto assets into the national financial governance system, driving the market's transformation from laissez-faire to "nationalized" institutional embedding. This is precisely the vision Lee Jae-myung envisions—a digital asset market guided by government, guaranteed by rules, and driven by innovation.

The future of Korean crypto policy may not be smooth sailing. Issues like stablecoin controversies, tax implementation, and international regulatory coordination still exist. However, it is certain that during Lee Jae-myung's term, cryptocurrency will no longer be a taboo gray area but will be written into the president's national strategy. Korea's crypto industry has finally reached an institutionalized starting point.

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