The leading candidate for the South Korean presidency has proposed the introduction of a Korean won stablecoin.

Source: Cointelegraph Original text: "The leading candidate for South Korean president proposes to launch a won stablecoin"

Lee Jae-myung, the leader of the Democratic Party of Korea, proposed the creation of a stablecoin pegged to the Korean won, aiming to prevent capital outflows and enhance national financial sovereignty.

According to the Korea Herald, Lee Jae-myung emphasized in a recent policy discussion that a Korean won stablecoin would allow South Korea to retain wealth domestically while reducing dependence on foreign-issued digital assets such as Tether (USDT) and USDC.

Currently, South Korean law prohibits the domestic issuance of stablecoins, forcing local exchanges to rely on dollar-based alternatives.

According to reports, in the first quarter of this year, the country's cryptocurrency exchanges recorded an outflow of 56.8 trillion won (40.8 billion USD), with nearly half related to foreign stablecoins.

"We must establish a stablecoin market backed by the Korean won to prevent national wealth from flowing overseas," said Lee Jae-myung.

The proposal is part of Lee Jae-myung's broader digital asset strategy, which includes legalizing spot cryptocurrency exchange-traded funds (ETFs).

Lee Jae-myung and his rival Kim Moon-soo from the People Power Party have both pledged to support the introduction of a spot cryptocurrency ETF.

Source: Konstantin Tkachuk

Lee Jae-myung's campaign platform also calls for allowing national pension funds and other institutional investors to participate in cryptocurrency investments after meeting price stability criteria.

To advance this goal, he proposed establishing a comprehensive monitoring system and reducing transaction fees to make cryptocurrencies more accessible under government oversight.

However, the stablecoin proposal has raised concerns among economists. Shin Beom-cheong, a senior researcher at the Korea Capital Market Institute, warned that stablecoins could lead to an expansion of the money supply and transfer monetary control to privately issued institutions.

"We cannot ignore the economic principles behind stablecoins. Stablecoins are essentially another form of banking, creating money out of thin air," said Shen Bocheng.

On May 13, the Democratic Party of Korea established a Digital Assets Committee focused on formulating cryptocurrency policies and promoting industry development.

The committee held its first meeting at the National Assembly member's office in Seoul, emphasizing the importance of addressing regulatory uncertainty and handling issues related to stablecoin regulation.

The new committee has joined existing similar organizations in South Korea, including the Virtual Assets Committee launched at the end of 2024 and another public-private partnership cryptocurrency working group initiated by the Financial Services Commission (FSC) in 2022.

The Democratic Party also plans to introduce the "Basic Law on Digital Assets." This bill will establish a legal framework for cryptocurrencies and stablecoins, requiring issuers to hold at least 50 billion KRW in reserves and obtain approval from the FSC.

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