South Korea’s leading presidential candidate, Lee Jae-myung, has proposed the introduction of a stablecoin pegged to the Korean won. This initiative aims to prevent capital outflows and strengthen national financial sovereignty.
National Wealth at Stake
Between January and March 2025, South Korean crypto exchanges reported asset outflows totaling 56.8 trillion won (approximately $40.8 billion), with nearly half linked to foreign stablecoins like USDT and USDC. Lee emphasized that a domestically issued stablecoin could help retain wealth within the country.
Legislative Hurdles
Current South Korean regulations prohibit the issuance of domestic stablecoins, compelling local exchanges to rely on foreign alternatives. Lee’s proposal includes establishing a won-backed stablecoin market to address this gap.
Broader Digital Asset Strategy
Lee’s stablecoin proposal is part of a comprehensive digital asset strategy. He advocates for legalizing spot cryptocurrency exchange-traded funds (ETFs) and allowing institutional players, such as the National Pension Fund, to invest in cryptocurrencies once price stability criteria are met. To facilitate this, he proposes an integrated monitoring system and reduced transaction fees.
Economic Concerns
Economists have expressed reservations about the stablecoin proposal. Shin Bo-sung, a senior researcher at the Korea Capital Market Institute, warned that stablecoins could inflate the money supply and shift monetary control to private issuers. He stated, “Stablecoins are essentially another form of banking, creating money out of nothing.”
Digital Asset Committee Formation
On May 13, 2025, the Democratic Party launched a Digital Asset Committee focused on developing cryptocurrency policies and promoting industry growth. The committee aims to resolve regulatory uncertainties and address issues like stablecoin regulation.
Conclusion
Lee Jae-myung’s proposal for a won-based stablecoin represents a significant shift in South Korea’s approach to digital assets. While aiming to enhance financial sovereignty and reduce reliance on foreign stablecoins, the initiative faces legislative and economic challenges that will need to be addressed in the coming months.
