South Korea’s newly elected President Lee Jae-myung is trying to transform the nation into a crypto powerhouse. Key steps to move forward include legalizing a spot Bitcoin ETF and introducing a KRW-backed stablecoin. These moves have the potential to quickly adopt crypto in Asia’s fourth largest economy.
Quick Policy Shift in a Snap Election
South Korea’s snap election rules meant that Lee Jae-myung took office immediately after winning 49.4% of votes on June 3 . This quick transition gives the president the power to act on his crypto agenda immediately. Unlike past administrations that denied access to overseas crypto ETFs, Lee’s team is expected to move quickly to change those policies. Lee Jae-myung now having control over the presidency and legislature, changes could be seen as soon as Q3 2025, potentially unlocking regulated ETF access for millions of Korean investors. Recent market moves like Litecoin’s surge following ETF approval speculations, highlight just how easily crypto prices could change due to policy changes. South Korea’s fast change could create similar market reactions, especially among altcoins waiting to become mainstream in financial ecosystems.
KRW-Backed Stablecoin Gains Momentum Amid REgional Crypto Shift
President Lee Jae-myung has announced a KRW-pegged stablecoin under the new Digital Asset Basic . The legislation suggests a ₩50 billion reserve requirement, tax benefits on crypto exchanges, and a licensing regime formalized—similar to the U.S GENIUS Act. Bank of Korea Governor Rhee Chang-yong has expressed concern about managing foreign exchange, but isn’t opposed to experimenting with a stablecoin. Senior deputy Ryoo Sang-dai indicated it could be issued by the nation’s licensed banks.
Should it go through, this will be the first G20-supported fiat stablecoin outside the U.S., making South Korea a key player in the Web3 regulated environment. This is because more than 15 million South Koreans—almost one-third of all adults—are themselves active crypto. This gives Lee a strong voter mandate for ambitious reforms. With uncontested command of the executive and both houses of the legislature until 2028, his administration is set to move rapidly. Lee’s plans come on the heels of spot Bitcoin and Ethereum ETFs launching in Hong Kong. They swept up over $260 million in a few weeks and caused regulators in Singapore, Japan, and Indonesia to reconsider their rules. If successful, the South Korean stablecoin debut could not only close the “Kimchi Premium” gap but also bring more money into the economy. That could challenge the dollar’s hold on Asian crypto markets.
Risks,Pushback & Policy Hurdles
Although the Democratic party has a strong majority, implementation is not guaranteed. The Financial Services Commission and Bank of Korea led by Chairman Lee Bok-hyun and Governor Rhee Chang-yong, must agree through the legal changes and policy shifts. Lee’s legal entanglements and potential Constitutional court intervention may also delay parts of his new crypto agenda. There may also be an issue of coordination between the stablecoin proposal and South Korea’s CBDC pilot, which may create a bigger issue between regulators. For a deeper dive into the regulatory implications, see our coverage of the SEC’s latest guidance.
My Take: A Bold Crypto gamble with High Stakes
As a crypto investor,I am cautiously optimistic. Lee’s policy has the potential to create billions in institutional flows, drive new liquidity to Korean exchanges, and potentially set South Korea up as a regulation Pioneer. However, execution risk, legal entanglements and monetary policy conflicts remain. If this is handled well, South Korea could become a global testbed for Web3 adoption in 2025. If this fails, it risks becoming another promising but unrealized crypto pivot.
Source
This article is based on: South Korea’s new president races to approve Bitcoin ETFs for 16 million traders
South Korea Moves Closer to Approving Spot Bitcoin ETFs
Further Reading
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Nicholas Newman is a 19-year-old based in Westchester, NY. He began his college journey at Iona University in New Rochelle and is now a student at Fordham University’s Gabelli School of Business in the Bronx NY, majoring in Accounting and Finance. Nicholas has been actively involved in the crypto space since 2020, both on the investment side and in development, and continues to explore opportunities at the intersection of finance, technology, and digital assets.
