Stablecoin and ETF hopes rise under Lee

With the inauguration of President Lee Jae-myung, expectations are rising for a significant acceleration in South Korea’s virtual asset sector. Market watchers are particularly focused on the prospects for a Korean won-based stablecoin and the introduction of exchange-traded funds (ETFs) tied to virtual assets.

On June 4, President Lee reaffirmed his administration’s commitment to transforming South Korea into a digital asset hub, as outlined in his campaign manifesto titled “The Republic of Korea Will Become a Digital Asset Hub.” The policy agenda focuses on laying the institutional groundwork to foster innovation and drive market growth in the blockchain and digital asset industries. First, he pledged to complete the second phase of the Virtual Asset User Protection Act (VAUPA), currently under review by financial authorities, and to establish a national-level innovation roadmap aimed at fostering growth in the virtual asset industry.

Among the most notable pledges is the potential introduction of a spot virtual asset ETF. While financial regulators have so far been cautious about allowing such instruments, calls for change are gaining traction. Korea Exchange CEO Jeong Eun-bo and Korea Financial Investment Association Chairman Seo Yoo-seok have both underscored the importance of listing virtual asset ETFs to enhance the competitiveness and maturity of Korea’s capital markets.

Another key initiative is the development and issuance of a Korean won-based stablecoin. During a discussion with leading economic YouTubers in May, President Lee drew a parallel between the slow pace of stablecoin development and the conservative monetary policies of the Joseon Dynasty. “We need to create a market for Korean won stablecoins to prevent capital outflow,” he said, warning that over-reliance on U.S. dollar-based stablecoins could lead to depreciation of the won and a flight of foreign investment.

Additional crypto policy priorities include lowering transaction fees for digital asset trading, expanding the tokenized securities market, and fostering the development of over-the-counter (OTC) trading platforms.


강우석 기자 wskang@donga.com