South Korea’s leading presidential aspirant Lee Jae-myung has urged the launch of a Korean won-backed stablecoin. He claims the move would halt capital flight and enhance the country’s financial sovereignty. Speaking at a policy conference, Lee emphasized the dangers of adopting foreign-issued stablecoins like USDT and USDC, mainly because they facilitate the outflow of Korean wealth from the country’s exchanges. We need to develop a won-backed stablecoin market not to let national funds flow overseas,” Lee concluded, as cited by The Korea Herald. South Korea Sees Billions of Crypto Outflows South Korean crypto exchanges saw outflows of 56.8 trillion won ($40.8 billion) from January to March 2025, with nearly half due to foreign stablecoins. Local issuance is not allowed, so Korean platforms are left with USD-based alternatives. Lee’s proposal is part of a larger digital asset plan aimed at enhancing local leadership and finding legal avenues for institutional crypto adoption. Pro-Crypto Policy Platform Gains Momentum Lee’s proposal involves legalizing spot cryptocurrency exchange-traded funds (ETFs), as well as authorizing the National Pension Fund and institutional investors to invest in digital assets when price conditions stabilize. To render accessibility a possibility, his ticket also foresees lower transaction costs and an inbuilt watchdog system to track crypto markets under government oversight. Expert Skepticism Regarding Monetary Policy Effect While embraced by pro-crypto voters, the stablecoin proposal has planted fear among economists . Shin Bo-sung from the Korea Capital Market Institute warned that such tokens would heat up the money supply and erode the authority of central banks. “Stablecoins are simply another form of banking, monetizing thin air,” Shin said. Democratic Party Forms Digital Asset Committee On May 13, the Democratic Party formally formed a “Digital Asset Committee” to develop crypto policy and regulatory frameworks. The committee joins other crypto-focused institutions, including the Virtual Asset Committee and a public-private task force created in 2022. It also plans to enact the Digital Asset Basic Act, which will require a minimum of 50 billion won reserves for stablecoin issuers and FSC approval. As South Korea’s 2025 election draws near, digital asset policy is emerging as a dominant theme—influencing both regulatory trajectories and voter expectations.
