As South Korea prepares to hold a new presidential election on June 3rd, the ruling "National Power Party" (PPP) is actively seeking support from cryptocurrency investors. In response, the main opposition party's presidential candidate Lee Jae-myung, in his latest campaign promise, focused on attracting young voters with a positive attitude towards cryptocurrencies, proposing to launch a Korean won stablecoin and allowing direct investment in various cryptocurrencies, such as Bitcoin exchange-traded funds.
Korean Won Stablecoin?
Lee Jae-myung also advocated for researching and developing a stablecoin pegged 1:1 with the Korean won. Lee Gae, the policy committee chairman of the Democratic Party, stated that the party has discussed cryptocurrency policies internally. The policy directly suggests that future Korean investors might be able to invest in ETF products tracking cryptocurrency prices like Bitcoin through traditional securities accounts.
Once price stability standards are met, national pension funds and other institutional participants will be allowed to invest in cryptocurrencies.
These proposals are seen as a challenge to the current Yoon Suk-yeol government's cautious and restrictive stance on cryptocurrency-related financial products. The Korean financial regulatory body previously warned that domestic securities companies intermediating Bitcoin spot ETFs listed in the US might violate the current Capital Market Act.
The stablecoin proposal has been questioned by Korean economic scholars. Shin Bo-sung, a senior researcher at the Korea Capital Market Institute, warned that stablecoins would inevitably increase the money supply and transfer monetary control from central banks to private issuers:
We must not ignore the economic principles behind them. Stablecoins are essentially another form of banking, creating money out of nothing.
Lee Jae-myung's Effortless Campaign
Despite criticism of the crypto policy, it appears highly attractive to the young, crypto-friendly Korean demographic.
The Democratic Party's crypto-friendly stance has somewhat altered the policy direction of the ruling party and other potential competing parties, with overall policies becoming more open and friendly to the crypto community.
Presidential polls have since been revealed, with Lee Jae-myung of the Democratic Party leading with a crushing 49% support. Although many dispute his pro-China stance, numerous Korean media and political commentary programs believe this is a campaign with a significant performance gap, primarily because the ruling National Power Party's Yoon Suk-yeol recently sparked widespread dissatisfaction with martial law issues. Consequently, Lee Jae-myung's crypto policy has become an unavoidable topic of discussion among Korean citizens.
This is the first instance in Asian developed countries, excluding China, where a national leader has mentioned stablecoin or CBDC topics. However, it remains undecided whether Lee Jae-myung's stablecoin will be issued by the central bank or private institutions, but it has already sparked active interest in the Asian cryptocurrency community.
Further Reading: South Korea to Progressively Allow Legal Entities to Open Virtual Asset Accounts in 3 Stages, Accelerating Stablecoin Regulatory Legislation
Further Reading: Google Play Removes 17 Korean Unregistered Overseas Exchanges, Including Kucoin, MEXC, CoinW
