How Will South Korea Market Benefit From the New Pro-Crypto President?

The crypto market in South Korea is expected to thrive due to the new president Lee Jae-myung’s support of crypto. The pro-crypto administration has announced it will introduce policies to support the growth of capital, innovations and digital finance.

Pro-Crypto President Sets South Korea Reform Agenda

Pro-crypto president Lee Jae-myung plans to let the National Pension Service invest in Bitcoin and other digital assets, according to the latest report. This would mark a shift in public fund strategy and bring institutional legitimacy to the local crypto market.

The pro-crypto presidential administration plans to legalize spot Bitcoin ETFs. These products remain banned under the current South Korea crypto regulations. A regulatory framework will be introduced to support the safe issuance and trading of spot-based ETFs.

Lee also intends to establish a won-backed national stablecoin. The move aims to prevent capital outflow and anchor stable digital liquidity within the domestic financial system.

Notably, over 20% of South Korea’s population actively uses crypto exchanges. This represents one of the highest retail participation rates in the world and signals continued demand for better market access.

Crypto Regulation and Market Structure

During pro-crypto President Lee’s term, the administration will work to complete the second phase of the Virtual Asset Framework Act. Guidelines will be created for oversight of stablecoin usage, the reserve funds they hold, and the procedures at exchanges.

Regulators will aim to increase openness in the system and cut back on actions aimed at manipulating the market. More so, the Financial Services Commission and the Bank of Korea are expected to increase tools and techniques to track unusual trading activities.

Moreover, exchanges must improve their internal systems to comply with rules. Part of this is following Know-Your-Customer (KYC) rules, meeting anti-money laundering standards and reporting events in real time.

The South Korean government will also introduce corporate crypto account systems. This move is designed to enable enterprises to transact and invest in digital assets under regulated conditions.

Blockchain Innovation Zones and Market Development

Pro-crypto president Lee’s crypto agenda includes reducing restrictions in designated blockchain development zones. These areas will receive regulatory exemptions to test new products and decentralized services.

Businesses handling blockchain technology, smart contracts and digital payments will gain from easy registration and financial aid.

More so, the report indicated that the objective is to encourage creativity without putting investors at risk. Talent development and technical training will be supported through cooperation between local authorities, universities and the private sector.

Lee stated that the government will support venture capital flow into the blockchain sector. This includes tax incentives for investors participating in early-stage funding rounds for Web3 projects.

South Korea Crypto Economy in Global Context

The number of people trading cryptocurrencies in South Korea is very high compared to many other countries. The digital currency exchange is popular with active traders who look for altcoins and smooth liquidity on its platforms.

In the past, South Korea kept a steady crypto trading volume despite the tough rules set by the authorities. The  “Kimchi Premium” indicated strong local demand, with prices trading higher than global averages.

Last year, the total value of South Korean virtual assets was more than 100 trillion won. The number of people using local exchanges is on the rise with 9.7 million accounts registered.

Also, having a pro-crypto president now is important as other countries such as Poland, are also moving toward more accepting digital asset policies. Karol Nawrocki, the new president of Poland, vowed to ease the government’s rules on cryptocurrencies.

Both countries are adopting crypto-supportive leadership in a global environment of increasing regulatory clarity. South Korea’s model of strict but adaptive regulation could serve as a reference for digital asset governance in advanced economies.