South Korea’s Election Outcome Unlikely to Deter Crypto Industry Growth

As South Korea’s voters will head to the polls on Tuesday to vote in the current presidential election, the big questions on countries’ crypto stance has become ever more clear. This is because, regardless of the outcome, the crypto industry will benefit, as both leading candidates, Lee Jae-myung and Yoon Suk-yeol, have promised to loosen regulations and expand avenues for crypto access.

Crypto Gets Political in South Korea

Candidate Lee Jae-myung has proposed the legalization of a spot crypto ETF and even allowing South Korea’s $884 billion pension fund to invest in crypto assets. He also advocated for the widespread issuance of a stablecoin pegged to the Korean Won as part of bringing in financial reforms and a strategy to curb capital outflows.

Currently, over a third of South Korea’s population (about 18 million people) are involved in crypto trading, making it one of the most active crypto markets globally. On certain trading days, the trading volume on South Korean crypto exchanges even outpaced that of the stock market. According to data released by the Bank of Korea, the total value of crypto assets held by South Koreans was approx $74.5 billion as of the end of last year.

However, in contrast to this, the country’s highest financial institution is still testing waters when it comes to stablecoin.

Bank of Korea Governor Lee Chan-yeol recently revealed that due to the potential circumvention of capital control measures by a KRW stablecoin, South Korea’s stance on introducing a KRW stablecoin in the domestic economy will be more cautious.

When it comes to present crypto regulation in South Korea, the Financial Services Commission (FSC) recently announced that new institutional clients must undergo enhanced verification procedures. Exchanges and their partner banks will be required to thoroughly assess the origin of funds and the intended purpose of crypto transactions. These measures are introduced to reduce the risk of money laundering and maintain stability in the financial system.

Amidst all of this, Korea and the US are seeing a trading tit-for-tat situation, reminiscent of the China-US trade war that had left imprints on the global economy and of course, the crypto market as well. The South Korean Ministry of Trade, Industry, and Energy stated that it will respond to the “U.S. Imposes 50% Tariff on Steel Products.” The South Korean government held an emergency meeting today with major domestic steel manufacturers, attended by officials from local key steel suppliers such as POSCO Group and Hyundai Steel.

U.S. President Trump stated last week that this Wednesday he would double the tariff on foreign steel imports to 50%.

Also Read: South Korea’s Bank to Begin CBDC Test Next Month