Ah, South Korea! Where the newly minted President Lee Jae-myung is racing to fulfill his campaign promise faster than a K-drama plot twist. He’s all set to allow the issuance of domestic stablecoins, because why not? His party has decided to roll out a crypto bill that’s as exciting as a night at the theatre! 🎭
Lee’s ruling Democratic Party has proposed the Digital Asset Basic Act, which sounds terribly important, doesn’t it? It aims to improve transparency and encourage competition in the crypto sector. Because nothing says “trust me” like a bill with a fancy name! 🧐
Now, here’s the kicker: local companies can issue stablecoins with a minimum equity capital of 500 million won (that’s about $368,000 for those who prefer their numbers in dollars). They must also guarantee refunds through reserves and get a thumbs-up from the Financial Services Commission, the country’s finance regulator. Talk about red tape! 🎀
Meanwhile, South Korean stablecoin trading is surging like a caffeinated hamster on a wheel, with transactions involving the leading US dollar stablecoins reaching a staggering 57 trillion won ($42 billion) on five main domestic exchanges in the first quarter. Who knew crypto could be so popular? 📈
This new legislation is expected to bolster such trades and boost one of the region’s largest crypto markets, with more than a third of the population—around 18 million people—reportedly participating. It’s like a national pastime, but with more risk! 🎢
Lee Works to Fulfill Election Promises
Our dear President Lee was sworn in after a decisive snap election victory on June 3. Quite the dramatic entrance, I must say! In addition to his plans for a local currency stablecoin, he’s also advocating for South Korea’s national pension fund to invest in Bitcoin and crypto. Because who doesn’t want their retirement funds in a volatile market? 💸
“We need to establish a won-backed stablecoin market to prevent national wealth from leaking overseas,” he declared during a policy discussion in May. A noble cause, indeed! 🌍
Bank of Korea Opposes Stablecoin Policy
But wait! Not everyone is clapping for Lee’s crypto ambitions. The Bank of Korea is raising an eyebrow, with Governor Rhee Chang-yong warning that non-bank stablecoins could weaken monetary policy effectiveness. Oh dear, a plot twist! 😱
The central bank insists it should take the lead in regulating a local currency stablecoin. After all, who wouldn’t want to be in charge of the money? 💰
Let’s not forget the poor South Korean investors who could still be nursing wounds from their investments in the multibillion-dollar Terra blockchain and its algorithmic stablecoin, co-created by local Do Kwon, which spectacularly collapsed in May 2022. Ouch! 😬
South Korean Crypto Stocks React
In the meantime, South Korea’s crypto push is fueling a rally in local stocks, such as mobile payment and digital wallet service KakaoPay, which has seen shares jump as much as 45% over the past five days. Talk about a rollercoaster ride! 🎢
However, JPMorgan analysts Stanley Yang and Jihyun Cho have chimed in, saying, “The rally in Kakao-related shares is fundamentally unjustifiable, as any concrete benefit from Lee’s stablecoin policy remains uncertain.” Well, that’s a buzzkill! 🥳
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2025-06-10 09:31