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South Korea’s newly elected president, Lee Jae-myung, has taken office after securing nearly 50% of the votes in a closely contested election. His administration has already outlined ambitious plans to promote cryptocurrency adoption and innovation within the region, signaling a new era for digital asset enthusiasts and investors.

Lee Jae-myung’s Vision for Cryptocurrency in South Korea

President Lee Jae-myung officially assumed office following his inauguration ceremony on June 4. The election has been described as a pivotal moment for the cryptocurrency sector in South Korea, where approximately one-third of the population reportedly owns digital assets. According to the Bank of South Korea, South Koreans collectively hold $74.5 billion worth of cryptocurrencies, showcasing the growing adoption of digital assets in the country.

Recognizing this trend, both major political parties took a more pro-crypto stance during their campaigns. Lee’s promises include easing crypto regulations and expanding access to digital assets, with a focus on fostering innovation. His proposals aim to position South Korea as a global leader in the cryptocurrency sector.

Legalization of Spot Crypto ETFs

One of President Lee’s key campaign promises is the legalization of spot cryptocurrency exchange-traded funds (ETFs). Notably, this proposal received bipartisan support, including backing from his opponent and the right-leaning People Power Party. If implemented, South Korean investors will gain access to ETFs linked to major cryptocurrencies such as Bitcoin and Ethereum.

Additionally, Lee has proposed allowing the nation’s pension fund to invest $884 billion into cryptocurrencies. This move could serve as a significant catalyst for the local crypto market, potentially increasing institutional participation and mainstream acceptance of digital assets.

Push for KRW-Backed Stablecoins

President Lee’s administration is also prioritizing the development of Korean won (KRW)-backed stablecoins. The Democratic Party of South Korea, led by Lee, believes that establishing a robust stablecoin framework is essential for maintaining the country’s competitiveness in the global financial landscape.

Min Byeong-deok, Chairman of the Democratic Party’s Digital Asset Committee, emphasized the urgency of this initiative. He stated that stablecoins could play a transformative role in the economy, potentially surpassing industries like artificial intelligence and semiconductors in significance. Min warned that failing to institutionalize KRW-backed stablecoins could allow U.S. dollar-based stablecoins to dominate the market.

“We need to take the lead in institutionalizing stablecoins before U.S. dollar-based stablecoins become firmly established. That is the only way we can secure a sure position in the global battle for stablecoin hegemony,” said Min.

A Legislative Push for Stablecoin Regulation

The Democratic Party is currently working to pass a stablecoin regulation bill, tentatively titled the “Basic Act on Digital Assets.” This legislation aims to establish a clear regulatory framework for stablecoins, providing a foundation for their development and adoption in South Korea. If successful, the bill could pave the way for the country to become a global leader in the stablecoin market.

Implications for South Korea’s Crypto Market

President Lee Jae-myung’s pro-crypto policies have the potential to significantly reshape South Korea’s digital asset landscape. By legalizing spot crypto ETFs, encouraging institutional investment, and advancing KRW-backed stablecoins, his administration is setting the stage for greater innovation and adoption in the cryptocurrency industry.

For investors and crypto enthusiasts, these developments could open up new opportunities and strengthen South Korea’s position as a key player in the global cryptocurrency ecosystem.

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