Another “Crypto President”?
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, revealing that Lee Jae-myung was elected as the new president with a vote share of 49.42%. His total vote count reached 17,287,513, setting a record for the highest in presidential elections. Lee Jae-myung also began his term on the 4th, relocating the presidential office back to the Blue House.
It is noteworthy that cryptocurrency policy became a hot topic among candidates from various parties for the first time during this presidential election in South Korea. In order to attract the votes of young people and the middle class, both the popular candidate Lee Jae-myung from the Democratic Party and Kim Moon-soo from the People Power Party proposed active and progressive commitments to cryptocurrency asset policies.
In his policy pledge, Lee Jae-myung discussed virtual assets as part of a “fair economy.” He stated that upon taking office, he would focus on “making South Korea a digital asset hub” to lay the foundation for cultivating the virtual asset industry.
Pro-Crypto Asset Advocate Lee Jae-myung
In terms of fundraising and gaining popularity through cryptocurrency, Lee Jae-myung is actually a “predecessor” of U.S. President Donald Trump. As early as 2022, during the presidential race against Yoon Suk-yeol, Lee demonstrated a proactive attitude towards cryptocurrency, aiming to attract a young electorate primarily interested in cryptocurrencies. He also raised campaign funds by issuing NFTs (non-fungible tokens), making him the first presidential candidate in the world to adopt this method. At that time, he mentioned, “Even if we are blindfolded, 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,” he stated. In January 2022, Lee participated in a meeting with representatives from four major virtual asset exchanges and experts, pledging 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 law; it is a unilateral measure taken by the Ministry of Justice,” he further stated: “If we have a system that ensures stability, 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, even trying to exclude them from the financial system. This itself is a wrong decision that hinders the normal development of the market. I apologize as a Democratic Party member.”
Furthermore, Lee Jae-myung announced that he would review allowing the issuance of tokenized securities (STOs) based on physical assets in virtual assets and increasing the tax exemption threshold for cryptocurrency investment returns.
As countries around the world implement cryptocurrency regulations and compliance policies, Lee Jae-myung significantly expanded his policy proposals concerning various categories of virtual assets in this election, and the cryptocurrency policies he advocates 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 on social media to support young people’s asset appreciation. He explicitly committed to institutionalizing a spot ETF system for virtual assets and building an integrated regulatory framework.
On May 13, 2025, the Democratic Party of Korea established a Digital Asset Committee to develop cryptocurrency policies and promote industrial growth. The committee held its first meeting in the National Assembly hall in Seoul, emphasizing the importance of resolving regulatory uncertainties and addressing stablecoin regulations. One of its primary tasks is to draft the “Basic Law on Digital Assets” to establish a legal framework for cryptocurrency and stablecoins. The committee plans to explore comprehensive virtual asset-related institutional arrangements covering stablecoins, NFTs, and STOs in the future.
Additionally, 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 capital outflow issues caused by foreign currency stablecoins (such as USDT and USDC). South Korea’s initial regulations prohibiting the issuance of domestic stablecoins have led exchanges to rely on dollar stablecoins. Lee Jae-myung believes that “we should issue a stablecoin linked to the won to prevent the outflow of national wealth.” He likened the failure to accelerate entry into the stablecoin market to “the isolationism of the late Joseon Dynasty.”
Allowing National Retirement Funds and Government Agencies to Invest in Crypto Assets
In terms of institutional investment, Lee Jae-myung supports expanding public funds’ allocation to cryptocurrency. He proposed allowing national retirement funds and other government agencies to invest in cryptocurrencies once they meet stability standards.
The Digital Asset Committee under his campaign team issued a statement last month stating: “Announcing that the National Pension Service and other retirement funds will invest in digital assets is not speculative investment, but rather a controlled and scientifically diversified investment strategy that aligns with international optimization models.” The committee also added that abandoning digital assets due to negative sentiment is a real risk of falling behind global financial flows, losing monetary sovereignty, and missing opportunities for national asset growth.
“Unlike the absurd notion that the National Pension Service investing in cryptocurrencies is speculative, the National Pension Service is already investing in assets indirectly linked to digital assets. 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 enables 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 legislation and regulatory frameworks to establish investment processes compliant with domestic and international regulations.
Relaxing Exchange and Bank Cooperation, Reducing Crypto Taxes
Lee Jae-myung’s regulation of cryptocurrency exchanges focuses on introducing a government-led reform mechanism. He proposed establishing a comprehensive monitoring system to centralize regulation of major trading platforms and reduce market transaction costs under government guidance.
Currently, the “1 Exchange – 1 Bank” rule in South Korea restricts each cryptocurrency exchange to partnering with only one bank for Korean won deposit and withdrawal services. This rule was initially established to prevent money laundering. Lee Jae-myung’s opponents and ruling party figures have proposed abolishing this rule to allow exchanges to collaborate with multiple banks.
Although Lee Jae-myung himself has not explicitly stated his position, his team emphasized accelerating the legislative process into the second phase, further refining the regulation of exchanges under the existing framework of the three-horse carriage (financial regulation, anti-money laundering, and taxation). This series of policies suggests that he leans towards relaxing exchange regulations and enhancing market competitiveness, while the previous government focused more on risk prevention and compliance requirements.
Regarding taxation, the Democratic Party, to which Lee Jae-myung belongs, proposed gradually implementing a cryptocurrency transaction tax while significantly increasing 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 about whether to delay the cryptocurrency tax rate, but increasing the tax exemption amount is a consensus. In contrast, the previous government under Yoon Suk-yeol initially sought to impose 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 actually acknowledges the universality of cryptocurrency trading, reduces overly harsh tax barriers, and provides more incentive space while taxing the market to help it develop healthily.
Conclusion
Lee Jae-myung’s victory not only represents a shift in the political landscape of South Korea but also signals a potential significant change in the country’s cryptocurrency asset policy direction. From “embracing regulation” to “cultivating industry,” from institutional building to capital market integration, his “new crypto policy” is already taking shape.
In the context of various countries around the world strengthening compliance regulations for cryptocurrencies, whether South Korea can achieve its goal of becoming a “digital asset hub” through this round of policy changes is worth continued attention from the market.
This article is collaboratively reprinted from: PANews