South Korea\u2019s Democratic Party leader Lee Jae-myung proposed creating a stablecoin tied to the Korean won to prevent capital outflows and strengthen national financial sovereignty.<\/p>\n
Speaking during a recent policy discussion, Lee argued that a won-based stablecoin would allow South Korea to retain wealth domestically while reducing reliance on foreign-issued digital assets like USDt (USDT<\/a>) and USDC (USDC<\/a>), according<\/a> to The Korea Herald.<\/p>\n Currently, South Korean law prohibits the issuance of domestic stablecoins, forcing local exchanges to rely on US dollar-based alternatives.<\/p>\n Between January and March, crypto exchanges in the country recorded 56.8 trillion won ($40.8 billion) in asset outflows, nearly half of which were linked to foreign stablecoins, the report said.<\/p>\n \u201cWe need to establish a won-backed stablecoin market to prevent national wealth from leaking overseas,\u201d Lee reportedly said.<\/p>\n Related: <\/strong><\/em>Top South Korean presidential hopefuls support legalizing Bitcoin ETFs<\/strong><\/em><\/a><\/p>\n The proposal is part of Lee\u2019s broader digital asset strategy, which includes legalizing spot cryptocurrency exchange-traded funds (ETFs)<\/a>.<\/p>\n Both Lee and rival Kim Moon-soo of the People Power Party have pledged to support<\/a> the introduction of spot crypto ETFs.<\/p>\n Source: <\/em>Konstantin Tkachuk<\/em><\/a><\/p>\n Lee\u2019s campaign also calls for the National Pension Fund and other institutional players to be allowed to invest in cryptocurrencies once price stability criteria are met.<\/p>\n To facilitate this, he proposed an integrated monitoring system and lower transaction fees, making crypto more accessible under government oversight.<\/p>\n However, the stablecoin proposal has sparked concern among economists. Shin Bo-sung, a senior Korea Capital Market Institute researcher, warned that stablecoins could inflate the money supply and shift monetary control to private issuers.<\/p>\n \u201cWe must not overlook the economic principles behind them. Stablecoins are essentially another form of banking, creating money out of nothing,\u201d Shin said.<\/p>\n Related: <\/strong><\/em>RedotPay enters South Korea with crypto-powered payment cards<\/strong><\/em><\/a><\/p>\n On May 13, South Korea\u2019s Democratic Party launched a Digital Asset Committee<\/a> focused on developing cryptocurrency policies and promoting industry growth.<\/p>\n The committee, which held its inaugural meeting at the National Assembly Members\u2019 Hall in Seoul, highlighted the importance of resolving regulatory uncertainty and addressing issues like\u00a0stablecoin<\/a> regulation.<\/p>\n The new committee joins similar organizations in South Korea, including the\u00a0Virtual Asset Committee<\/a>\u00a0launched<\/a> in late 2024 and another public-private crypto task force\u00a0introduced<\/a> in 2022, both initiated by the Financial Services Commission (FSC).<\/p>\n The Democratic Party is also set to introduce the Digital Asset Basic Act<\/a>. The bill would establish a legal framework for cryptocurrencies and stablecoins, requiring issuers to hold at least 50 billion won in reserves and gain approval from the FSC.<\/p>\nSouth Korean candidates make pro-crypto promises<\/h2>\n
Democratic Party sets up \u201cDigital Asset Committee\u201d<\/h2>\n