South Korean presidential candidate proposes to create national stablecoin
South Korea weighs won-backed stablecoin amid crypto policy debate
South Korea’s Democratic Party leader Lee Jae-myung has proposed the creation of a stablecoin tied to the Korean won in an effort to prevent capital outflows and bolster financial sovereignty.
Speaking at a recent policy forum, Lee argued that a won-denominated stablecoin would reduce reliance on foreign-issued digital assets like Tether (USDT) and USD Coin (USDC), which dominate domestic crypto markets, reports Cointelegraph.
South Korean law currently prohibits the issuance of local stablecoins, leaving exchanges dependent on dollar-backed tokens. According to a report by The Korea Herald, crypto exchanges in the country saw 56.8 trillion won ($40.8 billion) in outflows between January and March 2025, nearly half of which was tied to USD-based stablecoins.
Crypto policy emerges as key election issue
Lee’s proposal forms part of a wider crypto-friendly agenda ahead of South Korea’s next major election cycle. The Democratic Party leader has also called for legalizing spot crypto ETFs and permitting institutional players — including the National Pension Fund — to invest in digital assets under defined stability criteria.
His opponent, Kim Moon-soo of the ruling People Power Party, has voiced similar support for ETFs, signaling bipartisan momentum for crypto reforms. Lee also advocates for the implementation of an integrated monitoring framework and reduced transaction fees to improve market oversight and accessibility.
Economists raise red flags over stablecoin risks
Despite political support, Lee’s stablecoin proposal has triggered concern among some financial experts. Shin Bo-sung of the Korea Capital Market Institute warned that stablecoins could expand the money supply beyond central bank control. “Stablecoins are essentially another form of banking, creating money out of nothing,” he cautioned, pointing to the risk of undermining monetary policy.
Critics argue that shifting monetary power to private stablecoin issuers could challenge the Bank of Korea’s ability to manage inflation and liquidity. Nonetheless, Lee maintains that a government-backed framework could offer safeguards while keeping domestic wealth onshore. As the political debate continues, South Korea’s digital asset policy appears poised for significant change in the months ahead.
Recently we wrote that South Korea may be poised to follow Hong Kong’s lead in legalizing spot Bitcoin exchange-traded funds (ETFs), as top presidential candidates signal support for institutional crypto adoption.
