Crypto Policies Take Center Stage in South Korea’s Presidential Election

Cryptocurrency has become a pivotal issue in South Korea’s snap presidential election, with candidates actively courting the support of a growing number of digital asset investors across various age groups. All three front-runners have introduced crypto-friendly proposals, including the legalization of spot Bitcoin exchange-traded funds (ETFs) and the relaxation of banking regulations that currently limit fiat-to-crypto trading to just five platforms.

The June 3 election was triggered by the impeachment of Yoon Suk-yeol following his controversial declaration of martial law in late 2024. Despite the quick reversal by lawmakers, the power grab led to a political crisis and Yoon’s eventual removal from office. Yoon’s 2022 campaign heavily emphasized promises to reform crypto regulations, primarily targeting younger voters. This time, the political focus on digital assets has intensified as older generations increasingly invest significant wealth in digital assets.

Three leading presidential candidates have pledged to advance the local crypto economy. Lee Jae-myung of the Democratic Party, who lost to Yoon in the last election, is running a second crypto-friendly campaign. Kim Moon-soo is representing the ruling People Power Party (PPP), while Lee Jun-seok, the former youngest-ever leader of the PPP, is now leading his own newly formed Reform Party. The political sphere has actively embraced cryptocurrencies as a key campaign agenda, driven by the transition to a digital economy, the push for transparency in political funding, the spread of blockchain-based political participation technologies, and growing demands for investor protection.

Lee Jae-myung and Kim have both pledged to ease strict banking rules that require crypto exchanges to partner with licensed banks to offer fiat services, a system that has created a near-monopoly of just five approved platforms. Lee has also proposed launching a stablecoin pegged to the won to reduce reliance on tokens issued abroad. Lee Jun-seok, however, criticized Lee Jae-myung’s proposal, noting the past failure of a won-pegged algorithmic stablecoin, TerraKRW, part of the Terra ecosystem that suffered a multibillion-dollar collapse. During a live debate, Lee Jae-myung argued for the safety of centralized and fiat-backed stablecoins, while Lee Jun-seok questioned the lack of safeguards in Lee’s proposal.

Lee Jun-seok has also pledged to target 10% of the global gaming market through regulatory support in taxation, exports, and talent development, referring to gaming as South Korea’s “second semiconductor industry.” He argued that regulations dismissing blockchain-based play-to-earn (P2E) games accelerate the exodus of creative industries. P2E games remain banned under local regulations, but interest has surged among investors following the launch of a new title by Nexon, one of South Korea’s biggest game developers, along with a new cryptocurrency tied to its in-game economy.

South Korea had 9.7 million Know Your Customer-verified crypto investors by the end of 2024, with the biggest growth seen among investors in their 30s and 40s. Older investors hold larger holdings, with 78% of those holding at least 100 million won in crypto being over 40. The approval of Bitcoin ETFs has been a key campaign pledge for both Lee Jae-myung and Kim, following growing global momentum after the US gave the green light to spot Bitcoin ETFs in early 2024. However, the nation’s Capital Markets Act does not recognize crypto as eligible assets underlying ETFs, and the Financial Services Commission (FSC) is reviewing legal pathways to allow Bitcoin ETFs.

Yoon’s failed coup accelerated the presidential election and brought renewed urgency to unresolved issues in the local crypto industry. In the 2022 presidential election, cryptocurrency was viewed as speculative and untrustworthy. By the 2025 election, it had emerged as a key policy issue, with major candidates pushing for institutionalization and financial productization in response to the investment realities faced by young people. South Korea is one of the world’s largest crypto markets, driven largely by retail investors. Institutional players remain on the sidelines, awaiting their turn as the FSC prepares to launch pilot trading for professional investors.

Crypto policies were once seen as campaign strategies to sway younger voters, but this year, they’re seen as an economic and social issue that impacts multiple generations. Older generations are entering the digital sphere, accelerating calls for regulated investment vehicles, such as ETFs. Lee Jae-myung and Kim are the two leading candidates, with Lee leading Kim at 44.9% to 35.9%, according to a survey conducted from May 23 to 25. Lee Jun-seok is far behind at 9.6%, though he gained almost 3% from the preliminary survey conducted a week prior. The 21st presidential election is scheduled to take place on June 3.