20-5-2025 – Lee Jae-myung, leader of the Democratic Party, has unveiled an ambitious plan to introduce a stablecoin pegged to the Korean won. Speaking at a recent policy forum, Lee argued that such a digital currency would stem the tide of capital fleeing the country and reduce dependence on foreign stablecoins like USDT ($1.00) and USDC ($0.9997). According to The Korea Herald, Lee’s proposal aims to safeguard national wealth, addressing the staggering 56.8 trillion won ($40.8 billion) in asset outflows recorded by local crypto exchanges between January and March, nearly half of which were tied to US dollar-based stablecoins.
Lee’s vision extends beyond stablecoins, forming part of a broader pro-cryptocurrency agenda. He has championed the legalisation of spot cryptocurrency exchange-traded funds (ETFs), a pledge echoed by his rival, Kim Moon-soo of the People Power Party. To make digital assets more accessible, Lee advocates for an integrated regulatory framework, reduced transaction fees, and permission for institutional investors, including the National Pension Fund, to enter the crypto market once price stability is assured. These measures, he argues, would position South Korea as a leader in the global digital economy while maintaining robust government oversight.
However, the stablecoin proposal has ignited concern among economic experts. Shin Bo-sung, a senior researcher at the Korea Capital Market Institute, cautioned that stablecoins could disrupt monetary policy by inflating the money supply and ceding control to private issuers. “Stablecoins function like a form of private banking, creating money without traditional constraints,” Shin warned, urging careful consideration of their economic implications. South Korea’s current legal framework, which prohibits domestic stablecoin issuance, forces exchanges to rely on foreign alternatives, amplifying the urgency of Lee’s call for reform.
The Democratic Party has taken concrete steps to advance its crypto agenda. On 13 May, it launched the Digital Asset Committee during a meeting at Seoul’s National Assembly Members’ Hall. This body is tasked with crafting policies to foster the cryptocurrency sector and resolve regulatory ambiguities, particularly around stablecoins. The initiative complements existing efforts, such as the Financial Services Commission’s Virtual Asset Committee, established in late 2024, and a public-private crypto task force formed in 2022. Further solidifying its commitment, the party is preparing to introduce the Digital Asset Basic Act, a landmark bill that would create a legal foundation for cryptocurrencies and stablecoins. The legislation mandates that issuers maintain reserves of at least 50 billion won and secure approval from the Financial Services Commission.
