South Korea has entered a transformative phase with the election of President Lee Jae-myung, who took office on June 4, 2025, following a snap election necessitated by the impeachment of his predecessor. Lee’s ascent from being a child laborer to the nation’s highest office is truly inspiring, and it reflects a significant shift in South Korea’s socio-economic landscape, particularly regarding cryptocurrencies. This new chapter is expected to have favorable implications for crypto holders in South Korea.
President Lee’s vision is centered on positioning South Korea as a global hub for digital assets. His administration is set to advance a policy agenda that includes the legalization of spot cryptocurrency exchange-traded funds (ETFs). This move is a critical step towards reversing the country’s previous ban on ETFs and aligning South Korea with major financial markets worldwide. The integration of crypto into mainstream financial instruments is a sign of South Korea’s commitment to embracing digital innovation.
Moreover, Lee advocates for institutional investors, including the National Pension Fund, to invest in cryptocurrencies, a shift that indicates heightened acceptance of digital assets within traditional finance. South Korea has long been recognized as a significant player in Bitcoin trading and other cryptocurrencies, and the new direction proposed by Lee aims to expedite growth in this sector.
A cornerstone of the President’s crypto policy is the introduction of a Korean won-backed stablecoin. Lee argues that such a stablecoin can help prevent capital outflows while asserting monetary sovereignty in the digital age. This initiative underlines a broader commitment to integrating digital assets into the national economy while ensuring necessary regulatory oversight.
In a further move demonstrating the burgeoning interest in cryptocurrencies, South Korean entertainment company K Wave Media announced a significant $500 million securities deal aimed at funding a Bitcoin-centric treasury strategy. The company aspires to become the “Metaplanet of Korea,” directing a large portion of the proceeds toward purchasing Bitcoin and investing in infrastructure such as Bitcoin Lightning Network nodes. This announcement resulted in a dramatic stock surge of 162% on Nasdaq, a testament to the increasing financial interest in Bitcoin and digital assets in South Korea.
To pave the way for this digital transformation, President Lee’s government is anticipated to advance the Digital Asset Basic Act (DABA). This comprehensive legal framework aims to provide clarity and stability in the digital asset market, building on preliminary efforts initiated under prior administrations. The initiative reflects a broader recognition of the need for regulatory frameworks that can accommodate the rapid evolution of digital currencies.
In support of transparency and investor protection, the Financial Services Commission (FSC) has unveiled stricter Know Your Customer (KYC) regulations for crypto exchanges and non-profit organizations dealing with digital assets. These measures will aim to bolster compliance standards, enhance market transparency, prevent illicit activities, and safeguard investors as the market increasingly opens up to institutional involvement.
President Lee’s aspirations extend beyond cryptocurrencies; he is committed to a broader economic and social agenda. His “Transformative and Fair Growth” strategy aims to revitalize the economy while addressing systemic inequalities. The administration proposes innovations such as universal basic income, shorter workweeks, and investing in green technologies as part of this holistic agenda.
Additionally, Lee plans to reform the tax system concerning digital assets. Proposed adjustments include increasing the tax-free threshold for cryptocurrency gains from 2.5 million won to a remarkable 50 million won. This would decrease the tax burden on individual investors, fostering greater participation in the digital economy.
However, challenges remain. President Lee is tasked with addressing allegations of past misconduct while restoring public trust following the upheaval that resulted in his predecessor’s impeachment. Furthermore, implementing comprehensive crypto reforms requires a careful balance of innovation and regulatory prudence to ensure market stability and protect investors.
In 2024, the Bank of Korea (BOK) had previously dismissed the idea of establishing a strategic Bitcoin reserve. The central bank cited concerns about Bitcoin’s price volatility and associated risks, highlighting the challenges of incorporating cryptocurrencies into national financial strategies. The BOK’s stance contrasts with discussions in other nations about the potential for Bitcoin in foreign reserves, showcasing the delicate balance South Korea must navigate between innovative potential and financial prudence.
President Lee Jae-myung’s administration marks a pivotal moment for South Korea’s relationship with the digital economy. His pro-crypto stance, combined with a commitment to social reform and economic innovation, positions the nation to become a significant player in the global digital asset landscape. As his administration progresses, observers will keenly evaluate how South Korea manages the opportunities and challenges of this emerging digital frontier. Certainly, the demand for Bitcoin and other cryptocurrencies is projected to rise, benefitting the financial ecosystem within South Korea.
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