- The New President’s Crypto Agenda
- Regulatory Reforms and Innovation Zones
- Expected Effects on the Economy and Society
- Anticipated Risks
In June 2025, South Korea took a bold step toward integrating digital assets into its economy by electing Lee Jae-myung as president — a politician who openly advocates for the growth of the cryptocurrency sector. His victory wasn’t just the result of a fiercely contested election, but also a clear reflection of the growing influence of crypto in South Korean society, where an estimated 16 million people — about a third of the population — actively use crypto exchanges.
The New President’s Crypto Agenda
Lee Jae-myung made crypto reform one of the central pillars of his campaign. He pledged to position South Korea as a leader in digital finance in Asia, outlining a comprehensive program of initiatives, including:
- Legalizing spot cryptocurrency ETFs. Until now, these products have been banned in South Korea, despite their growing popularity in the US and other major economies. The new president plans to lift this restriction, opening the door for institutional investment and lending greater legitimacy to the digital asset market.
- Developing a national stablecoin pegged to the Korean won. Lee believes launching a homegrown stablecoin could help prevent capital outflow, reduce reliance on foreign-issued stablecoins, and provide stable digital liquidity within the country.
- Allowing the National Pension Fund to invest in cryptocurrencies. This move could be a game-changer for the market, as the fund manages nearly $900 billion in assets. Institutional participation would boost market credibility and attract fresh capital.
- Completing the second phase of digital asset legislation. The focus will be on increasing exchange transparency, regulating the issuance and circulation of stablecoins, and safeguarding investor rights.
Regulatory Reforms and Innovation Zones
A key priority for the new administration is to create a favorable regulatory environment for the crypto industry. The roadmap includes:
1. Разработка стандартов KYC (знай своего клиента) и ужесточение мер по борьбе с отмыванием денег, чтобы минимизировать риски мошенничества и повысить доверие к рынку.
2. Simplifying regulations in designated “blockchain zones” where startups and tech companies can test new products and services with minimal red tape.
3. Introducing corporate crypto accounts to allow businesses to officially manage and invest in digital assets under clear, transparent guidelines.
4. Developing KYC standards and tightening anti-money laundering measures to reduce fraud risks and build trust in the market.
Expected Effects on the Economy and Society
South Korea already ranks among the top nations for crypto trading volume and number of private investors. The new policies could lead to significant outcomes:
Growth of institutional investment
Legalizing ETFs and allowing pension fund involvement will attract major players, increasing market liquidity and reducing volatility.
Inflow of Foreign Capital
More transparent, predictable regulations are likely to draw in international companies and venture capital, particularly in the Web3 and blockchain startup sectors.
Boost to Innovation
Liberalizing rules in blockchain zones and supporting startups will accelerate the adoption of new technologies, from smart contracts and digital payments to decentralized finance (DeFi).
Strengthening Financial Stability
A state-backed stablecoin, combined with effective oversight, could help mitigate risks from price swings and market manipulation.
Anticipated Risks
As in any region, risks in the crypto space are fairly universal — and South Korea is no exception. High cryptocurrency volatility remains a major concern. The Bank of Korea (BoK) has already voiced worries that sharp price fluctuations could threaten the country’s financial stability, especially if digital assets are included in state reserves or pension funds, where losses from price instability could be significant. Another risk is to monetary policy itself. The widespread adoption of stablecoins and other digital assets could undermine the central bank’s ability to manage money supply and interest rates effectively.
There are also systemic and market risks to consider — such as liquidity imbalances and a market shift toward Bitcoin. Gradually lifting restrictions on crypto trading for businesses might create short-term market pressure, particularly on low-liquidity tokens. In the event of mass corporate sell-offs, market volatility and falling prices could follow. Moreover, institutional investors are expected to gravitate toward Bitcoin as the most stable digital asset, potentially reducing liquidity and interest in altcoins, which have traditionally been favored by South Korean retail investors.
