- Lee Jae-myung’s spot crypto ETF proposal targets 16 million South Koreans holding crypto.
- South Korea’s crypto policies heat up as 31% of the population now holds digital assets.
- Lee leads with 42% support, pushing crypto reforms as a key issue in the presidential race.
The Democratic Party’s presidential candidate Lee Jae-myung declared that legalizing spot cryptocurrency exchange-traded funds (ETFs) is among his administration’s priorities. On May 6, he announced the implementation of a wider financial policy that would enhance investment tools and access for young South Koreans.
The proposal brings forward three key elements, including authorization for spot crypto ETFs and lower transaction fees for digital assets, while establishing better investor protection. According to Lee, young people require an investment climate with enhanced security to accumulate wealth for their future goals. The current political campaign by Lee represents his initial venture into including cryptocurrency policies.
Survey data suggests that citizens accept the financial innovation strategies that Lee supports. According to the Korea National Barometer Survey poll from April 24 to 30, Lee stands at the front of the race with 42% voter support.
President Han Duck-soo maintains a distant third place as voters only give him 13% support. During the 2024 general election campaign, the Democratic Party made promises equivalent to those from Lee’s campaign, but past legislative attempts to legalize spot ETFs failed to progress.
Crypto Reforms Also Promised by Rival Party
People Power Party released crypto policy guidelines to counter Democratic Party policies in late April 2022. The party wants to authorize Bitcoin spot ETFs while doing away with one-bank-one-exchange rules and establishing stablecoin legal protocols. The primary political parties in South Korea have made regulation and innovation a pressing election matter for the upcoming campaign period.
The one-exchange-one-bank regulation has encountered opposition within the crypto industry. The South Korean crypto regulation requires each exchange to maintain sole banking connections with one local financial institution. This regulatory measure aims to decrease money laundering exposures and increase the certainty of transactions. The regulatory framework has drawn criticism because it reduces investment opportunities for marketplace participants and potential users.
The practice of crypto trading continues to be popular within South Korean borders. Statistics from industry experts indicate cryptocurrency ownership among 16 million South Koreans makes up 31% of the population. The importance of crypto policy takes center stage in upcoming political discussions leading up to the June 3 presidential election.
Political Context and Recent Developments
Following recent controversies, Kim Moon-soo, the People Power Party nominee, finds himself in a difficult electoral position. Following the declaration of martial law by Yoon Suk Yeol while he served as president, the party leader and president was impeached under constitutional terms. The announcement triggered an immediate collapse in Bitcoin alongside major Ethereum altcoins. The market prices returned to stability within six hours of the court ending its martial law declaration.
The Constitutional Court voted 8-0 to support Yoon’s impeachment on April 4. The court officially removed him from power, reshaping the country’s political territory. The political transition interrupts politicians’ focus on prioritizing economic revival alongside innovation, while making digital assets regulation their central point of discussion.
