South Korea's New President Lee Jae-myung Promises Pro-Crypto Regulations

South Korea has elected a new president, Lee Jae-myung, who has expressed strong support for cryptocurrency. Lee won the presidency with 49.42% of the votes, taking the oath on Wednesday. Both leading presidential candidates, Lee Jae-myung and Kim Moon-soo, had indicated their support for pro-crypto regulations, suggesting a favorable environment for digital assets regardless of the election outcome.

The country boasts a large and active crypto market, with over 18 million individuals engaged in digital assets. This significant participation underscores the importance of cryptocurrency in South Korea's financial landscape.

During his campaign, President Lee made several pro-crypto vows, including the approval of spot crypto ETFs and the reduction of crypto transaction fees. He emphasized the need to create a safer investment environment, particularly for young people, to help them build assets and plan for the future. Lee also proposed the creation of a won-backed stablecoin to address the 56.8 trillion won ($40.8 billion) crypto outflow, aiming to reduce dependence on foreign stablecoins like USDT and USDC.

Under Lee's leadership, South Korea is set to implement the second phase of its crypto regulatory framework. Early this year, reports indicated that the Financial Services Commission (FSC) aims to draft the legislation within the second half of this year. The first digital asset regulatory framework was enacted in July of the previous year. Additionally, South Korea has formed a digital asset committee that will play a central role in drafting pledges, driving legislation, and building frameworks for digital assets. The committee, chaired by Rep. Min Byeong-deok, aims to have expertise and implement actual policies directly under the president's oversight.

Lee's pro-crypto stance and the formation of the digital asset committee signal a significant shift in South Korea's approach to digital assets. The country's large and active crypto market, combined with the new regulatory framework, positions South Korea as a key player in the global cryptocurrency landscape. The approval of spot crypto ETFs and the reduction of transaction fees are expected to further boost the country's crypto ecosystem, making it more accessible and attractive to investors. The proposed won-backed stablecoin also represents a strategic move to retain capital within the country, reducing reliance on foreign stablecoins and enhancing financial stability.