South Korea’s Crypto Industry Poised for Growth as Candidates Pledge Easier Regulations

South Korea’s crypto industry is set to benefit from the upcoming snap election, as both leading presidential candidates have pledged to ease regulations and expand crypto access. The election, scheduled for June 3, will replace the impeached President Yoon Suk-yeol. The two main candidates, Lee Jae-myung of the center-left Democratic Party and Kim Moon-soo of the conservative People Power Party, have both run on pro-crypto platforms.

Lee Jae-myung has proposed legalizing spot crypto exchange-traded funds (ETFs) and allowing South Korea’s national pension fund to invest in cryptocurrency. He also advocates for the wider issuance of a stablecoin backed by the South Korean won to modernize the country’s financial system and stem capital outflows. Lee aims to ease strict banking rules that require crypto exchanges to partner with licensed banks to offer fiat services.

Kim Moon-soo, the conservative candidate, also supports legalizing spot crypto ETFs and has pledged to ease regulations and expand crypto adoption. This rare bipartisan alignment on crypto policies suggests that the country’s crypto investors face a clear win regardless of the election outcome. According to a Gallup Korea poll, 49% of respondents favored Lee, while 36% said they would vote for Kim.

The urgency for clear regulations stems from South Korea’s high retail crypto participation. Stricter regulations were implemented in July 2024 to impose strict requirements on exchanges, including potential life sentences for criminal violations. On May 20, the country’s Financial Services Commission finalized sweeping new measures, introducing new guidelines for nonprofit crypto sales and stricter listing standards for exchanges. The Democratic Party also launched a Digital Asset Committee focused on developing cryptocurrency policies and promoting industry growth in May.

South Korea has one of the world’s most active crypto markets, with over 18 million people, or more than a third of the population, involved in crypto. The regulatory changes proposed by the candidates reflect a growing recognition of the potential benefits of cryptocurrencies and blockchain technology. By embracing these technologies, South Korea aims to stay competitive in the rapidly evolving digital economy. The crypto industry's growth could also contribute to job creation and economic development, further bolstering the country's economic prospects.

However, the implementation of these policies will depend on the winning candidate's ability to navigate the political landscape and gain support from other stakeholders. The crypto industry will be closely watching the election results and the subsequent regulatory developments, as they could shape the future of digital assets in South Korea.