Crypto Takes Center Stage in South Korea’s Presidential Election as Candidates Back ETFs and Stablecoins
As South Korea gears up for its next presidential election on June 3, cryptocurrency has taken a prominent position in the national political conversation. With over 15 million crypto investors — nearly one-third of the population — the digital asset community has emerged as a powerful voting bloc, particularly among young, tech-savvy citizens.
In a bid to capture these votes, the country’s leading presidential candidates are making bold promises around cryptocurrency policy — signaling a significant shift in how digital assets are viewed at the highest levels of government.
Crypto ETF Legalization Becomes a Key Promise
Democratic Party candidate Lee Jae-myung and People Power Party’s Kim Moon-soo are both campaigning on platforms that support the legalization of spot Bitcoin exchange-traded funds (ETFs). These products, currently banned in South Korea, would allow investors to gain exposure to digital assets like Bitcoin through traditional financial markets — a move aimed at integrating crypto into the broader investment landscape.
“All three major South Korean presidential candidates support Bitcoin ETFs and institutional investment,” noted Ki Young Ju, CEO of analytics platform CryptoQuant. “Currently, Bitcoin ETFs and institutional investments are banned in Korea. 100% volume comes from retail.”
Push for a Won-Backed Stablecoin Market
Lee Jae-myung is also proposing the development of a domestic, won-backed stablecoin market. His plan aims to reduce reliance on foreign-issued stablecoins such as USDT and USDC, which currently account for nearly half of the $40.8 billion in crypto outflows recorded by local exchanges between January and March this year.
“We need to establish a won-backed stablecoin market to prevent national wealth from leaking overseas,” Lee emphasized during a policy roundtable with economic content creators.
The proposal would rely on the upcoming Digital Asset Basic Act, which is expected to be tabled this week. The legislation would define the legal framework for issuing and circulating digital assets in South Korea. Under this framework, stablecoin issuers would be required to register with the Financial Services Commission (FSC) and maintain a reserve of at least 50 billion won (approximately $36 million).
However, not everyone is convinced. Critics argue that allowing private entities to create stablecoins effectively delegates the government’s authority to create money.
“Stablecoins are essentially another form of banking, creating money out of nothing,” warned Shin Bo-sung, a senior researcher at the Korea Capital Market Institute.
Institutional Adoption and Investor Protection
In addition to ETF legalization and stablecoins, Lee's campaign also supports opening the door for institutional investors — including the National Pension Fund — to participate in digital asset markets once certain price stability conditions are met.
Lee Keun-ju, president of the Korea Fintech Industry Association, believes such moves could transform South Korea’s financial landscape. “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,” he said.
Still, some remain skeptical. “Sounds cool, but no celebration until proposals are on paper and their real benefits are clear,” commented Konstantin Tkachuk, co-founder of Titannet DAO.
Public confidence is further tested when candidates appear ill-informed. One voter expressed frustration after a presidential hopeful was unable to explain the difference between USDT and USDC during a public appearance. “Do they see the crypto scene in Korea as just a quick cash grab to exploit and abandon?” the user asked.
Tighter Regulations and Market Oversight
Even as candidates tout their crypto-friendly credentials, regulators are tightening their grip on the market. The Financial Supervisory Service (FSS) revealed that over half of suspicious crypto transactions flagged in late 2023 involved investors in their 20s and 30s — the same demographic being targeted by political campaigns.
The country is also moving ahead with the next phase of its regulatory roadmap. The second installment of South Korea’s virtual asset regulation framework is expected in the second half of 2025. Meanwhile, efforts to protect investors have already led to Google blocking access to 17 unregistered foreign crypto exchanges.