Another "Crypto President"? Lee Jae-myung's High-Stakes Bet on South Korea's New Crypto Policies Ignites Market Imagination

Author: Zen, PANews

From a humble background to being elected president, Lee Jae-myung has become an inspirational figure in the hearts of the South Korean people. On June 4, the South Korean Election Commission announced that the vote counting for the 21st presidential election was completed that day, showing that Lee Jae-myung was elected as the new president with a vote rate of 49.42%. His vote count reached 17,287,513, setting a record for the highest in history. Lee Jae-myung also began his term on the 4th, moving the presidential office back to the Blue House.

It is noteworthy that in this presidential election, cryptocurrency policy became a hot topic among candidates for the first time. To attract votes from young people and the middle class, both the popular Democratic Party candidate Lee Jae-myung and the People Power Party candidate Kim Moon-soo proposed proactive and progressive commitments regarding cryptocurrency policies.

In his policy commitment document, Lee Jae-myung discussed virtual assets as part of a "fair economy." He stated that after taking office, he would focus on "making South Korea a digital asset center" to lay the foundation for cultivating the virtual asset industry.

Lee Jae-myung: "Pro" Cryptocurrency

In terms of fundraising and gaining popularity through cryptocurrency, Lee Jae-myung is actually a "predecessor" of former U.S. President Trump.

As early as 2022, during the presidential race against Yoon Suk-yeol, Lee Jae-myung demonstrated a positive attitude towards cryptocurrency and was interpreted as intending to attract young voters who are primarily interested in cryptocurrencies. He also raised campaign funds by issuing NFTs (non-fungible tokens), becoming the first presidential candidate in the world to adopt this method. At that time, he mentioned the cryptocurrency industry, stating: "Even if we are blinded, the existing market will not disappear. If we cannot avoid it, we must seize the opportunity."

"I will actively support the establishment of a digital asset ecosystem, including creative digital asset issuance, secure trading and storage, indirect investment, and risk diversification through insurance," Lee Jae-myung said in January 2022, when he attended a meeting with representatives and experts from the four major virtual asset exchanges, promising to recognize the virtual asset industry institutionally and ensure various business opportunities.

Lee Jae-myung pointed out that after taking sufficient protective measures to safeguard investors and prevent market chaos, he would also consider allowing Initial Coin Offerings (ICOs). "The ICO ban is not a law, but a unilateral measure taken by the Ministry of Justice," he further stated: "If we have a system that ensures stability, then it is possible to achieve this goal before enacting licensing laws."

Lee Jae-myung has also publicly stated: "The previous Democratic government took a negative attitude towards virtual assets and even tried to exclude them from the financial system, which itself is a wrong decision that hinders the normal development of the market. "I apologize as a Democratic Party member." In addition, Lee Jae-myung announced that he would review allowing the issuance of security tokens (STOs) based on physical assets in virtual assets and raise the tax exemption threshold for cryptocurrency investment returns.

As countries around the world implement regulations and compliance policies for cryptocurrencies, Lee Jae-myung significantly expanded his policy proposals for various categories of virtual assets in this election, and the cryptocurrency policies he advocated have generally become more specific.

Promoting Spot ETFs and Stablecoins

"I will create a safe investment environment for young people to accumulate assets and plan for the future." On May 6, 2025, Lee Jae-myung promised to support the appreciation of young people's assets. He clearly promised to institutionalize virtual asset spot ETFs and build an integrated regulatory system.

On May 13, 2025, the Democratic Party of Korea established a Digital Asset Committee dedicated to formulating cryptocurrency policies and promoting industry development. The committee held its first meeting in the National Assembly hall in Seoul, emphasizing the importance of addressing regulatory uncertainties and resolving issues related to stablecoin regulation. One of its primary tasks is to draft the "Basic Law on Digital Assets" to establish a legal framework for cryptocurrency assets and stablecoins. The committee plans to explore comprehensive virtual asset-related institutional arrangements covering stablecoins, NFTs, and security token offerings (STOs) in the future.

In addition, Lee Jae-myung expressed support for issuing a Korean won-pegged stablecoin, advocating for the establishment of a stablecoin market denominated in won to reduce the capital outflow issues caused by foreign currency stablecoins (such as USDT, USDC). The previous regulatory ban on the issuance of domestic stablecoins led exchanges to rely on dollar stablecoins; Lee Jae-myung believes that "stablecoins pegged to the won should be issued to prevent the outflow of national wealth." He compared the failure to accelerate entry into the stablecoin market to "the isolation of the late Joseon Dynasty."

Allowing National Pension Funds and Government Agencies to Invest in Cryptocurrency

In terms of institutional investment, Lee Jae-myung supports expanding public funds' allocation to cryptocurrency assets. He proposed allowing national pension funds and other government agencies to invest in cryptocurrencies after meeting stability standards.

The Digital Asset Committee under his campaign committee stated last month: "Announcing that the National Pension Service and other pension funds will invest in digital assets is not speculative investment, but a controlled and scientifically diversified investment strategy that aligns with international optimization models." The committee also added that abandoning digital assets due to emotional aversion is a real risk of falling behind global financial flows, losing monetary sovereignty, and missing opportunities for national asset growth.

"Contrary to the claim that investing in cryptocurrencies by the National Pension Service is absurd, the National Pension Service has already invested in assets indirectly linked to digital assets," they stated. "Investing in digital assets is not a reckless gamble, but part of an investment strategy faithful to traditional theories." The Digital Asset Committee plans to establish a system that allows the National Pension Service to move beyond its current indirect investments in virtual assets to direct investments. After incorporating virtual assets into the system to ensure stability, the National Pension Service will continue to improve the legislative and regulatory framework to establish investment processes that comply with domestic and international regulations.

Easing Exchange and Bank Cooperation, Reducing Cryptocurrency Taxes

Lee Jae-myung's regulation of cryptocurrency exchanges focuses on introducing a government-led rectification mechanism. He proposed establishing a comprehensive monitoring system to centrally regulate major trading platforms and guide the government to reduce market trading fees.

The current "1 Exchange - 1 Bank" rule in South Korea restricts each cryptocurrency exchange to cooperate with only one bank for Korean won deposit and withdrawal services. This rule was initially set to prevent money laundering. Lee Jae-myung's opponent, a member of the ruling party, has proposed abolishing this rule to allow exchanges to cooperate with multiple banks.

Although Lee Jae-myung himself has not made a clear statement, his team emphasized accelerating legislation into the second phase, further improving exchange regulation under the existing tripartite framework (financial regulation, anti-money laundering, and taxation). This series of policies suggests that he leans towards easing exchange regulations and enhancing market competitiveness, while the previous government focused more on risk prevention and compliance requirements.

In terms of taxation, the Democratic Party, to which Lee Jae-myung belongs, proposed gradually implementing a cryptocurrency transaction tax while significantly raising the deductible tax exemption amount. According to reports from Yonhap News Agency, the Democratic Party plans to impose a virtual asset income tax in 2024 as scheduled but will raise the deduction limit for individual trading gains from the current 2.5 million won to 50 million won to alleviate the tax burden on ordinary investors, especially young people.

Yonhap News Agency pointed out that there is controversy within the party regarding whether to delay the cryptocurrency tax rate, but raising the tax exemption amount is a consensus. In contrast, the Yoon Suk-yeol government, which was in power in 2022, initially required a 20% tax rate on virtual currency gains starting in 2023 (on amounts exceeding 2.5 million won in annual gains). Lee Jae-myung's approach effectively acknowledges the prevalence of cryptocurrency trading, reducing overly harsh tax barriers, allowing the government to provide more incentive space while taxing, and helping the market develop healthily.

Conclusion

Lee Jae-myung's victory not only represents a shift in the political landscape of South Korea but also signals that the country's direction on cryptocurrency asset policies may undergo significant changes. From "embracing regulation" to "cultivating the industry," from institutional construction to capital market integration, his "new cryptocurrency policies" are beginning to take shape.

Against the backdrop of many countries globally strengthening compliance regulation of cryptocurrencies, whether South Korea can achieve its goal of becoming a "digital asset center" through this round of policy changes is worth the market's continued attention.