South Korea’s stock surge, led by Kakao Pay and LG CNS, ties to the new president’s won‑backed stablecoin push and crypto reforms.
President Lee Jae-myung’s commitment to allowing cryptocurrency assets to be supported by the won has resulted in a significant increase in South Korean equities. As a result, retail investors have developed an intense interest in companies associated with digital currency initiatives.
South Korea has been Asia’s most successful market in the first half of the year, as evidenced by the nearly 30% increase in the benchmark Kospi Composite index.
Stocks associated with the Bank of Korea’s digital currency initiatives have undergone substantial price fluctuations, as reported by the Financial Times.
Kakao Pay shares more than quadrupled, while LG CNS shares rose by approximately 70% in June before retreating due to profit-taking.
Speculative interest is directed toward fintech equities.
Stablecoin connections have resulted in substantial movements for Kosdaq-listed companies.
Aton, a fintech security firm, experienced an 80% increase in value. At the same time, ME2ON, a mobile game producer, tripled in value following its subsidiary’s introduction of a dollar-pegged stablecoin for casino applications.
According to data from the Korea Financial Investment Association, the retail enthusiasm has resulted in outstanding margin loans reaching Won20.5 trillion ($15 billion).
The government has not yet announced detailed cryptocurrency policies, but investors are increasing leverage to pursue gains.
The appointment of Kim Yong-beam, a digital token advocate, as Lee’s chief policy adviser heightened expectations.
This month, a parliamentary measure was proposed to enable companies with an equity capital of Won500 million to issue Won-based stablecoins.
South Korea is home to one of the most active crypto markets in the world, with approximately 20% of the population engaging in the trading of digital assets.
The Bank of Korea was compelled to expedite its preparations for digital currency due to the ₩57 trillion in trading volume of USD-pegged stablecoins during the first quarter.
Although the government has not established licensing requirements or timelines, banks, brokerages, and fintech companies demonstrate a significant interest in stablecoin issuance.
A fintech industry executive said:
“We are keen to do the business, but we are watching out for where the government draws the line in terms of regulation,”
Governor Rhee Chang-yong of the Bank of Korea has expressed apprehension regarding non-bank entities’ issuance of won-pegged stablecoins. Additionally, he referenced prospective effects on the efficacy of monetary policy and capital flows.
