South Korea’s presidential front-runner Lee Jae-myung pledges support for spot crypto ETFs and won-backed stablecoins, aiming to attract young voters and reshape the nation’s digital finance landscape.
With South Korea’s presidential election fast approaching, Democratic Party candidate Lee Jae-myung is sharpening his appeal to the nation’s 15 million cryptocurrency investors—many of them young—by pledging sweeping reforms that could transform the country’s financial system.
At the centre of Lee’s campaign is a bold commitment to legalise spot cryptocurrency exchange-traded funds (ETFs), a move widely viewed as a bridge between the volatile world of digital assets and the stability of traditional finance. These funds would allow cryptocurrencies like Bitcoin to be traded on South Korea’s stock markets, opening the door to institutional and retail investors alike.
Lee has also promised to establish an integrated monitoring system and reduce transaction costs for crypto traders, arguing that well-regulated ETFs can serve as crucial tools for hedging against market volatility.
Unlike the more conservative stance held by many Korean regulators, Lee’s position reflects a willingness to embrace financial innovation. His campaign argues that integrating cryptocurrencies into diversified investment portfolios is not only feasible but essential to modern financial planning.
Legislative efforts are already underway to revise the Capital Markets Act to formally recognise digital assets as eligible underlying commodities for ETFs. If successful, the amendments could legitimise cryptocurrencies in a way that few countries have attempted so far.
Further proposals by Lee include allowing large institutional players such as the National Pension Fund to invest directly in digital assets, once regulatory criteria on value stability are met.
“A Bitcoin spot ETF is not simply a product. It can be the gateway to broadening the connection between the digital asset ecosystem and the capital market,” said Lee Keun-ju, president of the Korea Fintech Industry Association. He also emphasised the need for robust legal and infrastructure reforms to support this shift.
Beyond ETFs, Lee’s economic platform includes plans to create a domestic stablecoin tied to the Korean won. The goal, he says, is to prevent national wealth from flowing out of the country through foreign currency-based digital assets.
“We need to establish a won-backed stablecoin market to prevent national wealth from leaking overseas,” Lee said during a recent policy discussion with economic-focused YouTubers.
Currently, South Korea bans the issuance of stablecoins pegged to the won, allowing only foreign assets such as USDT and USDC to be traded. This has contributed to an estimated 56.8 trillion won ($40.8 billion) in capital outflows from Korean exchanges between January and March, nearly half of which involved dollar-based stablecoins.
Lee argues that a domestically issued, government-regulated stablecoin would mitigate capital flight and reduce dependence on foreign currencies.
However, the proposal has raised concerns among economists. Shin Bo-sung, a senior researcher at the Korea Capital Market Institute, warned of unintended economic risks, including inflation of the money supply.
“It effectively hands the privilege of money creation to the private sector. We must not overlook the economic principles behind them. Stablecoins are essentially another form of banking, creating money out of nothing,” Shin said.
As part of its broader crypto strategy, Lee’s Democratic Party is set to introduce the Digital Asset Basic Act this week. The legislation aims to define the legal framework for digital assets in Korea, including guidelines for issuance, circulation, and listing. It would also require stablecoin issuers to gain approval from the Financial Services Commission and hold reserves of at least 50 billion won.
With crypto adoption in South Korea at an all-time high, Lee’s campaign could reshape the nation’s financial future—and his ambitious digital finance proposals may prove decisive in winning over the country’s young and digitally native electorate.
