South Korea's PPP Pledges to Abolish Crypto Exchange Banking Law

The South Korean People Power Party (PPP) has announced its intention to abolish the country’s controversial crypto exchange banking law if its candidate wins the upcoming Presidential Elections scheduled for June. The party has pledged to eliminate a regulation that mandates domestic banks to form exclusive partnerships with domestic cryptocurrency exchanges, with the banks bearing the majority of the risk liability. This law has significantly impacted the crypto industry, as without such partnerships, exchanges are unable to offer crypto-fiat pairings to their clients. Currently, only five domestic exchanges have managed to secure these partnerships, leading to the closure of many smaller exchanges and forcing others to offer only crypto-to-crypto trading.

The PPP has identified the repeal of this law as one of seven major tasks aimed at fostering the crypto asset ecosystem. During a summit at the National Assembly on April 28, PP lawmaker Park Soo-min highlighted the restrictive nature of the current rules, stating that they limit citizens' ability to trade cryptocurrencies through their preferred banks and have solidified market monopolies. The PPP's approach aims to promote competition among exchanges and enhance the overall crypto environment.

In addition to abolishing the banking law, the PPP has unveiled six other crypto-related policy pledges. These include the launch of corporate crypto trading by the end of 2025, the creation of a Virtual Asset Special Committee reporting to the President, the approval of crypto spot ETF trading within 2025, legislation for security token offerings (STOs), the implementation of global-standard stablecoin regulations, and providing clarity on crypto taxation. The PPP believes these policies will drive innovation in the industry and restore investor confidence.

With the presidential election approaching, the political landscape in South Korea remains divided. The Democratic Party (DP), the PPP’s main rival, is currently leading in the polls with ratings of almost 47%, compared to the PPP’s 35%. The DP has already selected Lee Jae-myung as its official candidate, while the PPP is expected to choose between Former Labor Minister Kim Moon-soo, ex-Daegu Mayor Hong Joon-pyo, and former PPP leader Han Dong-hoon. Han has previously advocated for Bitcoin ETF approval and deregulation of the domestic crypto sector to enhance its international competitiveness. Members of the DP have also expressed interest in reforming crypto regulations and establishing a national strategic Bitcoin reserve, although critics suggest that both parties are using crypto discussions to attract younger voters.

Crypto regulations were a significant topic during the 2022 South Korean Presidential Elections, but the victorious Yoon Suk-yeol failed to deliver on many of his crypto-related manifesto promises. The upcoming election will be crucial in determining the future direction of South Korea’s crypto policies, with both major parties presenting their visions for the industry. The PPP’s pledge to abolish the controversial banking law and implement a series of pro-crypto measures could significantly impact the country’s crypto landscape if its candidate is elected.