South Korea Overhauls Crypto Policy to Boost Digital Asset Ecosystem

South Korea has taken significant steps to modernize its cryptocurrency landscape, signaling a clear policy shift toward embracing digital assets as part of the country's broader financial strategy. On August 13, 2025, President Lee Jae-myung announced a regulatory reform plan aimed at building a robust digital asset ecosystem. The move reflects a strategic pivot from earlier restrictive policies and marks a more structured, business-friendly approach to crypto regulation. The reforms include the regulation of KRW-pegged stablecoins, enhanced investor protections, and accelerated legislative processes to support innovation in the sector [1].

The government's actions have already had a measurable impact on the market. Investors have responded positively, with blockchain-related stocks such as Kakao Pay and LG CNS seeing notable gains. This optimism is mirrored in broader crypto market movements, with Bitcoin experiencing short-term price volatility but maintaining a 15.36% increase over the past 90 days [2]. The reforms are expected to attract both domestic and international investment, as well as foster a more competitive environment for blockchain startups and financial institutions.

The regulatory approach also extends to how digital assets are treated within the legal framework. The National Assembly has proposed three separate Digital Asset bills, all of which aim to provide a comprehensive legal basis for the issuance and use of stablecoins. This legislative push reflects the government’s intent to move away from a speculative view of crypto and toward a more institutionalized structure. The Bank of Korea has also paused its digital won project, effectively allowing private-sector entities to lead in stablecoin innovation [3].

In parallel, industry players are adapting to these changes. Coinone, one of South Korea’s leading cryptocurrency exchanges, recently announced a leadership transition, with its founder stepping down as CEO. The company cited the need for a more centralized leadership model as a way to improve efficiency and stability, a move that aligns with the broader trend of firms adjusting to a more regulated environment [4].

The government’s emphasis on stablecoins in particular underscores a recognition of their potential to enhance liquidity, facilitate cross-border transactions, and promote financial inclusion. As the legislative and regulatory frameworks continue to develop, South Korea appears poised to become a global leader in the digital asset space. This shift in policy reflects a broader acknowledgment of the role that cryptocurrencies and blockchain technology can play in the future of finance [5].

Source:

[1] South Korea announces reforms to attract cryptocurrency. https://www.bitget.com/news/detail/12560604913707

[2] Crypto for Advisors: Asian Stablecoin Adoption. https://www.coindesk.com/coindesk-indices/2025/08/14/crypto-for-advisors-asian-stablecoin-adoption

[3] Here's How Stablecoins Are Taking Over South Korea. https://www.ccn.com/education/crypto/digital-won-paused-stablecoins-south-korea-explained/

[4] Coinone CEO Transition Marks Strategic Shift to Single-... https://www.ainvest.com/news/coinone-ceo-transition-marks-strategic-shift-single-leadership-model-2508/

[5] Hot Chain, Summer in the City: July's Global Policy Heatwave. https://www.fireblocks.com/blog/hot-chain-summer-in-the-city-julys-global-policy-heatwave/