In a bold policy pitch blending technological innovation with financial sovereignty, South Korean presidential candidate Lee Jae-myung has thrown his support behind the launch of a stablecoin backed by the Korean won. His proposal, which he unveiled during a recent policy roundtable, reflects growing concerns about the country’s increasing reliance on foreign-denominated digital assets and the capital flight they may be enabling.
Lee, leader of South Korea’s Democratic Party, believes that a won-pegged stablecoin could help stem the outflow of domestic capital while anchoring the country more firmly in the rapidly evolving digital economy. “We need to establish a won-backed stablecoin market to prevent national wealth from leaking overseas,” Lee said, as reported by The Korea Herald. His remarks come at a time when stablecoin usage in South Korea is surging, largely due to the unavailability of domestically issued alternatives.
South Korean law currently prohibits the issuance of homegrown stablecoins, which has forced local crypto exchanges to rely heavily on U.S. dollar-based stablecoins like USDT and USDC. According to data from the first quarter of 2025, crypto platforms in the country saw nearly 56.8 trillion won (roughly $40.8 billion) in capital outflows, with a significant portion of that linked to transactions involving foreign-issued stablecoins.
Lee’s proposal, while ambitious, is only one part of his broader digital asset agenda. He has been increasingly vocal about the need to legalize spot cryptocurrency exchange-traded funds (ETFs), a position also supported by his primary political rival, Kim Moon-soo of the People Power Party. Both candidates appear eager to tap into the growing voter interest in crypto, with investors across all age groups becoming more active in digital assets.
Lee’s digital finance platform includes a call to allow institutional investors — including the National Pension Fund — to gain exposure to cryptocurrencies under certain conditions, such as when market volatility diminishes. To support this shift, he’s advocating for the creation of a national crypto monitoring system, along with lower transaction fees that would reduce the barrier to entry for average investors.
Still, not everyone is on board with the idea of a state-backed stablecoin. Critics have raised economic red flags, cautioning that such a move could blur the lines between central banking and private finance. Shin Bo-sung, a senior researcher at the Korea Capital Market Institute, warned that stablecoins — even those backed by fiat — can disrupt monetary policy by expanding the money supply in ways that central banks cannot easily control. “Stablecoins are essentially another form of banking, creating money out of nothing,” he said.
Despite such reservations, the Democratic Party has taken concrete steps toward shaping a national crypto framework. On May 13, the party officially launched a Digital Asset Committee, tasked with crafting cryptocurrency regulations and promoting the development of blockchain technology. This new body joins other initiatives, including the Financial Services Commission’s Virtual Asset Committee and a public-private task force formed back in 2022.
Among the committee’s first objectives is to draft and introduce the “Digital Asset Basic Act,” a legislative blueprint that would require stablecoin issuers to hold at least 50 billion won in reserves and obtain authorization from the Financial Services Commission. This proposed regulation aims to balance innovation with accountability, ensuring that South Korea doesn’t fall behind in the digital finance race while still safeguarding economic stability.
As South Korea heads toward its next presidential election, crypto policy is quickly becoming a defining issue. With proposals like a won-backed stablecoin on the table, the country appears poised to become a key player in the global digital finance landscape — provided it can reconcile innovation with regulatory caution.
