Another "crypto president"? Lee Jae-myung's big bet on South Korea's new crypto policies has set off market speculation

Author: Zen, PANews

From a poor family to being elected president, Lee Jae-myung has become an inspirational figure in the hearts of the Korean people. On June 4, the Korean Election Commission announced that the counting of votes for the 21st presidential election was completed on that day, and the results showed that Lee Jae-myung was elected as the new president with 49.42% of the votes. His vote count was 17,287,513, the highest in all previous elections. Lee Jae-myung also took office on the 4th and moved the presidential palace back to the Blue House.

It is worth noting that in this South Korean presidential election, cryptocurrency policy has become a hot topic for candidates from all parties for the first time. In order to win votes from young people and the middle class, Lee Jae-myung, the candidate of the Democratic Party of Korea, and Kim Moon-soo, the candidate of the National Power Party, both proposed positive and progressive crypto asset policy commitments.

In his policy commitment, Lee Jae-myung discussed virtual assets as part of a "fair economy." He said that after taking office, he will lay the foundation for cultivating the virtual asset industry with the theme of "making South Korea a digital asset center."

Lee Jae-myung is “pro” crypto assets

In terms of raising funds and gaining popularity for himself through crypto assets, Lee Jae-myung is actually a "predecessor" of US President Trump.

As early as 2022, when he was competing with Yoon Seok-yeol for the presidency, Lee Jae-myung showed a positive attitude towards crypto assets, and was interpreted as intending to attract young voters who mainly use cryptocurrencies. He also raised campaign funds by issuing NFTs (non-fungible tokens), becoming the first presidential candidate in the world to adopt this method. At that time, he mentioned the cryptocurrency industry and said: "Even if we are blinded, the existing market will not disappear. If we can't avoid it, we must seize the opportunity."

"I will actively support the establishment of a digital asset ecosystem, including creative digital asset issuance, secure trading and storage, indirect investment, and diversification of investment risks through insurance." In January 2022, Lee Jae-myung attended a meeting of representatives and experts from the four major virtual asset exchanges and expressed his commitment to institutionally recognize the virtual asset business and safeguard various business opportunities.

Lee Jae-myung noted that he will also consider allowing initial coin offerings (ICOs) after adequate safeguards are put in place to protect investors and prevent market chaos. “The ICO ban is not a law, but a unilateral measure taken by the Ministry of Justice,” he further stated: “If we have a system that ensures stability, it will be possible to achieve this before enacting a licensing law.”

Lee Jae-myung also publicly stated: "In the past, the Democratic Party government took a negative attitude towards virtual assets and even tried to exclude them from the financial system. This is in itself a wrong decision that hinders the normal development of the market." "I apologize as a member of the Democratic Party." In addition, Lee Jae-myung also announced that he would review the issuance of security tokens (STOs) based on physical assets in virtual assets and increase the tax-free threshold for cryptocurrency investment income.

As countries around the world implement cryptocurrency regulation and compliance policies, in this election, Lee Jae-myung has significantly expanded his policy propositions on various categories of virtual assets, and the crypto policies he advocates are generally more specific.

Promote spot ETFs and stablecoins

"I will create a safe investment environment so that young people can accumulate assets and plan for the future." On May 6, 2025, Lee Jae-myung pledged on social networks to support young people's asset appreciation. He explicitly promised to institutionalize virtual asset spot ETFs and build an integrated regulatory system.

On May 13, 2025, the Democratic Party of Korea established a Digital Asset Committee dedicated to developing cryptocurrency policies and promoting industry development. The committee held its first meeting in the Seoul National Assembly Hall, emphasizing the importance of resolving regulatory uncertainties and solving problems such as stablecoin regulation. One of its top priorities is to formulate the Basic Law on Digital Assets to establish a legal framework for crypto assets and stablecoins. The committee plans to explore the direction of a full range of virtual asset-related institutional arrangements covering stablecoins, NFTs, and security token issuance (STO) in the future.

In addition, Lee Jae-myung expressed support for the issuance of stablecoins pegged to the Korean won, and advocated the establishment of a stablecoin market denominated in the Korean won to reduce the capital outflow problem caused by foreign currency stablecoins (such as USDT and USDC). South Korea's early regulatory prohibitions on the issuance of local stablecoins led to exchanges relying on US dollar stablecoins; Lee Jae-myung believed that "stablecoins pegged to the Korean won should be issued to prevent the outflow of national wealth." As for the policy of failing to speed up entry into the stablecoin market, Lee Jae-myung compared it to "the closed-door policy at the end of the Joseon Dynasty.

Allowing national pension funds and government agencies to invest in crypto assets

In terms of institutional investment, Lee Jae-myung supports expanding the allocation of public funds to crypto assets. He proposed allowing the National Pension Fund and other government agencies to invest in cryptocurrencies after meeting stability standards.

The Digital Asset Committee under his campaign committee issued a statement last month saying: "The announcement that pension funds such as the National Pension Service will invest in digital assets is not a speculative investment, but a diversified investment strategy that is in line with international optimization models, controlled and scientific." The committee also added that abandoning digital assets due to emotional aversion is a real risk of falling behind global financial flows, losing monetary sovereignty, and missing opportunities for national asset growth.

"Contrary to the nonsense that the National Pension Service is investing in cryptocurrencies, the National Pension Service is already investing in assets indirectly linked to digital assets," and "investing in digital assets is not a reckless bet, but part of an investment strategy that is loyal to traditional theory." The Digital Asset Committee plans to establish a system that will enable the National Pension Service to go beyond the current indirect investment in virtual assets and make direct investments. After incorporating virtual assets into the system to ensure stability, the National Pension Service will continue to improve the legislative and regulatory systems and establish investment processes that comply with domestic and foreign regulations.

Relaxing exchanges and banks’ cooperation to reduce crypto taxes

Lee Jae-myung's supervision of crypto exchanges focuses on introducing a government-led rectification mechanism. He proposed the establishment of a comprehensive monitoring system to centrally supervise major trading platforms and to guide the government to reduce market transaction costs.

The current "1 exchange - 1 bank" rule in South Korea restricts each crypto exchange to only cooperate with one bank to provide won deposit and withdrawal services. This rule was originally set up to prevent money laundering. Lee Jae-myung's opponents, ruling party members, have proposed abolishing the rule so that exchanges can cooperate with multiple banks.

Although Lee Jae-myung himself has not made a clear statement, his team emphasized the need to speed up legislation into the second phase and further improve the exchange supervision under the existing three-pronged framework (financial supervision, anti-money laundering, and taxation). This series of policies suggests that he is inclined to relax exchange regulation and enhance market competitiveness, while the previous government focused more on risk prevention and compliance requirements.

In terms of taxation, Lee Jae-myung's Democratic Party proposed to gradually implement the cryptocurrency transaction tax, but significantly increase the deductible tax amount. According to Yonhap News Agency, the Democratic Party plans to levy virtual asset income tax as scheduled in 2024, but increase the deduction limit for personal trading income from the current 2.5 million won to 50 million won to reduce the tax burden on ordinary investors, especially young people.

Yonhap News Agency pointed out that there is controversy within the party over whether to delay the crypto tax rate, but there is a consensus on increasing the tax exemption. In contrast, the Yoon Seok-yeol government, which came to power in 2022, initially required a 20% tax on virtual currency earnings (over 2.5 million won in annual earnings) to be levied in 2023. Lee Jae-myung's approach actually recognizes the universality of crypto transactions, reduces overly harsh tax barriers, and allows the government to provide more incentives while levying taxes to help the market develop healthily.

Conclusion

Lee Jae-myung's victory not only represents a change in South Korea's political landscape, but also indicates that the country's crypto asset policy direction may usher in major changes. From "embracing regulation" to "cultivating the industry", from institutional construction to capital market integration, his "new crypto policy" has begun to take shape.

Against the backdrop of many countries around the world strengthening cryptocurrency compliance supervision, whether South Korea can achieve the goal of becoming a "digital asset center" through this round of policy changes is worthy of the market's continued attention.