South Korea’s newly elected President Lee Jae-myung is pushing forward with plans to allow stablecoin issuance by local companies, fulfilling a key campaign promise, according to a Bloomberg report.

On Tuesday, the ruling Democratic Party proposed the Digital Asset Basic Act. The act aims to enhance transparency while cultivating competition in the cryptocurrency sector.

It would enable South Korean companies with a minimum of KRW 500 million (approximately US$367,876) in equity capital to issue stablecoins, provided that reserves are held to guarantee refunds.

The proposed act also mentions that asset-linked digital assets would also require approval from the Financial Services Commission, according to part of the act’s text released by the party.

President Lee is a vocal supporter of stablecoin adoption. Over 18 million South Koreans, more than a third of the population, reportedly engage in digital assets. Daily volumes purportedly sometimes surpass the turnover seen on Kospi and Kosdaq.

Stablecoin activity has reached KRW 57 trillion (US$42 billion) in the first quarter, consisting of trading volumes for USDT, USDC, and USDS across five major local exchanges, according to Bank of Korea data cited by Yonhap News.

Still, the plan faces pushback. Bank of Korea’s Governor Rhee Chang-yong has raised concerns over stablecoins issued by non-bank entities.

He warned that they could undermine the effectiveness of the monetary policy, and emphasised that the central bank should lead in regulating any stablecoin linked to the Korean won.

Despite concerns, the move has ignited investor optimism. Shares of KakaoPay Corp surged as much as 18% on Tuesday, the most since January 2024.

Even so, analysts at JPMorgan, Stanley Yang and Jihyun Cho have expressed caution. According to the Bloomberg report, they shared that the surge in Kakao-linked stocks lacks solid justification, as the tangible impact of President Lee’s stablecoin policy remains unclear.

South Korea’s renewed interest in stablecoin regulation comes as global momentum builds. The US is expected to vote on stablecoin legislation this week. Here in Hong Kong, the Stablecoins Ordinance is expected to take effect on 1 August 2025, post the recent passage of the Stablecoins Bill.

South Korea, still recovering from the US$40 billion collapse of TerraUSD in 2022, might be proceeding cautiously through moves like its Digital Asset Basic Act proposal, but with clear regulatory intent.

Conversion is based on the exchange rate of 1 KRW = 0.0000730069 USD as of 11 June 2025

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