South Korea’s New President Pledges to Legalize Spot Bitcoin ETFs and Introduce KRW-Backed Stablecoin

South Korea’s newly elected president, Lee Jae-myung, has pledged to legalize spot Bitcoin exchange-traded funds (ETFs) and introduce a national KRW-backed stablecoin. This move could significantly boost crypto adoption across Asia’s fourth-largest economy. Lee, a liberal politician and former mayor of Seongnam, secured the presidency with 49.4% of the vote in the June 3rd snap election, ending months of political uncertainty following the resignation of his conservative predecessor.

Lee’s campaign platform includes a comprehensive embrace of digital assets. If implemented, his promises would reverse South Korea’s long-standing crypto ETF ban and create the world’s first G20-backed fiat stablecoin outside the U.S. Unlike other countries with extended transition periods, South Korea’s snap election rules require the new president to take office immediately. This swift transition could expedite the implementation of Lee’s crypto-friendly policies.

The nation’s top financial regulator, the Financial Services Commission (FSC), has historically barred brokerage access to overseas crypto ETFs. This stance has isolated South Korea’s capital markets from the global trend of gaining ETF exposure to Bitcoin and Ethereum. Lee’s vow to overturn this regulation and license domestic ETF products could provide Korean brokerages, pension funds, and institutional investors with compliant, high-volume access to digital assets by Q4 2025.

Lee’s push for a sovereign KRW-pegged stablecoin is part of an updated “Digital Asset Basic Act” scheduled to be tabled next week. The draft legislation includes reserve requirements (₩50 billion minimum), licensing frameworks, and VAT exemptions for crypto swaps, measures designed to mainstream tokenized won. This stablecoin would not compete with private issuers like Tether or Circle but would aim to challenge U.S. dollar dominance in Asian trading pairs. With Korean exchanges like Upbit and Bithumb regularly processing significant daily volumes, even a small user migration to a won-backed stablecoin could shift liquidity away from offshore dollar-based markets.

Lee’s crypto tilt was strategic. Over 15 million South Koreans, roughly 30% of the adult population, trade crypto, and the electorate has become one of the most blockchain-savvy in the world. Young voters in their 20s and 30s, many of whom see crypto as a path to financial empowerment in a hyper-competitive society, were decisive in swinging the vote. Exit polling showed a clear generational divide, with Lee capturing a commanding lead among younger demographics.

The win gives his Democratic Party control of both the executive and legislative branches through 2028, providing him with rare latitude to implement crypto-forward reforms quickly. Lee’s pro-crypto pivot comes just two months after Hong Kong launched Asia’s first spot Bitcoin and Ethereum ETFs, which attracted significant assets under management within weeks. South Korea’s move is likely to intensify pressure on Japan’s Financial Services Agency and Singapore’s MAS to accelerate their own digital asset approvals, or risk falling behind.

With a ready-made retail base and some of Asia’s largest trading platforms, South Korea could become the new epicenter of regulated crypto activity in the region. That raises the possibility of new dynamics within the ‘Kimchi Premium’ through ETF arbitrage flows, tighter price convergence between East and West, and regulatory domino effects throughout the Pacific Rim.

However, implementation is far from guaranteed. The FSC’s current leadership remains in place, and it’s unclear whether Chairman Lee Bok-hyun will align with the new administration’s vision without legislative amendments to the Capital Markets Act. Institutional resistance, from banks to conservative lawmakers, could also slow progress. Moreover, Lee Jae-myung is still entangled in legal proceedings stemming from alleged campaign finance violations. South Korea’s Constitutional Court retains the power to suspend sitting presidents under certain conditions. For crypto watchers, that means the real policy window may be closer to 12–18 months than a full term. There’s also potential conflict brewing between the proposed stablecoin and the Bank of Korea’s ongoing CBDC pilot, which could complicate inter-agency coordination.

Regardless of these caveats, Lee’s election marks a sea change in how a major G20 economy views crypto. If successful, his ETF and stablecoin initiatives would not only rewire South Korea’s financial plumbing but also offer a regulatory model that blends populist momentum with institutional structure. In a global environment where crypto policy often moves at a glacial pace, South Korea just hit fast-forward. The rest of Asia, and the global financial community, will be watching closely.