South Korea elects pro-crypto Lee as new president; crypto ETFs and KRW stablecoins on horizon

South Korea officially named left-wing party candidate Lee Jae-myung as its new president on Wednesday, after former leader Yoon Suk-yeol's failed military rule and subsequent backlash led to his impeachment after three years as president.

On Tuesday, the country saw a voter turnout of 79.4%, the highest rate in 28 years. Lee took 49.42% of the votes against right-wing opponent Kim Moon-soo's 41.15%.

While Lee vowed to tackle the country's urgent economic challenges including more support for lower-income families and small business owners, he also pledged to build a stronger foundation for the local crypto industry.

Lee's crypto pledge includes the local adoption of spot cryptocurrency exchange-traded funds, an idea the country's financial authorities have been toying with since the success of U.S. crypto ETFs. Local issuance and trade of any crypto ETFs are banned locally as of today.

Another key push is the approval of stablecoins pegged to the Korean won. Lee, in a discussion last month, stated that the country needs to establish a won-based stablecoin market to prevent the outflow of domestic capital.

Under his leadership, South Korea will also strive to finish the second legislation to the two-part digital asset regulatory framework, where the upcoming law will have a focus on stablecoin regulation and transparency mandates for exchanges.

Some other crypto promises include minimizing regulations in areas designated as special regions for blockchain growth to maximize innovation and efficiency.

Not the first

However, this is not the first time South Korea elected a candidate that promised to push crypto into the limelight. Impeached conservative president Yoon made several crypto-friendly promises aimed at deregulating the crypto industry, but many saw delays and limited progress during his three-year term. 

Yoon's plans to deregulate the crypto industry met resistance from the Financial Services Commission, which did not ease its strict regulations, citing investor protection. Nonetheless, the FSC has since become more amenable to easing strict crypto rules, which could benefit Lee's crypto commitments.

South Korea hosts one of the world's largest cryptocurrency markets, characterized for its focus on altcoin trading. As of the end of last year, South Korea had 9.7 million crypto exchange users, which is nearly 20% of its total population, according to the FSC.