South Korea’s leading presidential candidate has proposed a won-based stablecoin, signaling growing political support for blockchain innovation.
To stop capital flight, Lee Jae-myung, the presidential candidate of South Korea, supported a stablecoin backed by the won.
Lee Jae-myung, the head of the Democratic Party of South Korea, suggested establishing a stablecoin based on the Korean won to bolster national financial sovereignty and stop capital flight.
According to The Korea Herald, Lee made the case during a recent policy discussion that a won-based stablecoin would enable South Korea to preserve its riches at home while lowering its dependency on foreign-issued digital assets like USDT (USDT$1.00) and USDC (USDC$0.9997).
Since domestic stablecoin issuance is now prohibited by South Korean law, local exchanges must resort to alternatives denominated in US dollars.
According to the research, nearly half of the 56.8 trillion won ($40.8 billion) in asset outflows that the nation’s cryptocurrency exchanges saw between January and March were associated with foreign stablecoins.
According to reports, Lee stated, “We must create a won-backed stablecoin market to stop national wealth from leaking overseas.”
Candidates from South Korea pledge to support cryptocurrency.
Legalizing spot cryptocurrency exchange-traded funds (ETFs) is one aspect of Lee’s larger digital asset policy.
Lee and Kim Moon-soo, the opponent of the People Power Party, have promised to back the launch of spot cryptocurrency ETFs.
According to Lee’s campaign, the National Pension Fund and other institutional investors should be permitted to invest in cryptocurrencies if price stability requirements are satisfied.
To make cryptocurrency more accessible under governmental supervision, he suggested lowering transaction fees and implementing an integrated monitoring system.
Despite their potential benefits, economists are concerned about the concept of stablecoins. Stablecoins have the potential to increase the money supply and transfer monetary authority to private issuers, according to Shin Bo-sung, a senior researcher at the Korea Capital Market Institute.
“We must not ignore the underlying economic theories. Shin argues that stablecoins are merely another form of banking that creates money arbitrarily.
The “Digital Asset Committee” is established by the Democratic Party.
The Democratic Party of South Korea established a Digital Asset Committee on May 13 to create cryptocurrency regulations and encourage their expansion.
The group emphasized the significance of tackling concerns, including stablecoin regulation and eliminating regulatory confusion, during its first meeting, which was held at Seoul’s National Assembly Members’ Hall.
The new committee joins other comparable groups in South Korea, such as the Virtual Asset Committee, which was established by the Financial Services Commission (FSC) in late 2024, and another public-private crypto task force, which was established in 2022.
The Democratic Party will also introduce the Digital Asset Basic Act. The measure would create a legal framework for stablecoins and cryptocurrencies, requiring issuers to obtain FSC approval and maintain at least 50 billion won in reserves.
