South Korean presidential front-runner proposes won-based stablecoin

South Korea’s Democratic Celebration chief Lee Jae-myung proposed making a stablecoin tied to the Korean received to stop capital outflows and strengthen nationwide monetary sovereignty.

Talking throughout a latest coverage dialogue, Lee argued {that a} won-based stablecoin would enable South Korea to retain wealth domestically whereas decreasing reliance on foreign-issued digital belongings like USDt (USDT) and USDC (USDC), in accordance with The Korea Herald.

At the moment, South Korean legislation prohibits the issuance of home stablecoins, forcing native exchanges to depend on US dollar-based alternate options.

Between January and March, crypto exchanges within the nation recorded 56.8 trillion received ($40.8 billion) in asset outflows, almost half of which have been linked to overseas stablecoins, the report stated.

“We have to set up a won-backed stablecoin market to stop nationwide wealth from leaking abroad,” Lee reportedly stated.

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South Korean candidates make pro-crypto guarantees

The proposal is a part of Lee’s broader digital asset technique, which incorporates legalizing spot cryptocurrency exchange-traded funds (ETFs).

Each Lee and rival Kim Moon-soo of the Folks Energy Celebration have pledged to help the introduction of spot crypto ETFs.

Lee’s marketing campaign additionally requires the Nationwide Pension Fund and different institutional gamers to be allowed to put money into cryptocurrencies as soon as worth stability standards are met.

To facilitate this, he proposed an built-in monitoring system and decrease transaction charges, making crypto extra accessible underneath authorities oversight.

Nevertheless, the stablecoin proposal has sparked concern amongst economists. Shin Bo-sung, a senior Korea Capital Market Institute researcher, warned that stablecoins might inflate the cash provide and shift financial management to non-public issuers.

“We should not overlook the financial rules behind them. Stablecoins are basically one other type of banking, creating cash out of nothing,” Shin stated.

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Democratic Celebration units up “Digital Asset Committee”

On Might 13, South Korea’s Democratic Celebration launched a Digital Asset Committee centered on creating cryptocurrency insurance policies and selling trade development.

The committee, which held its inaugural assembly on the Nationwide Meeting Members’ Corridor in Seoul, highlighted the significance of resolving regulatory uncertainty and addressing points like stablecoin regulation.

The brand new committee joins related organizations in South Korea, together with the Digital Asset Committee launched in late 2024 and one other public-private crypto job pressure launched in 2022, each initiated by the Monetary Companies Fee (FSC).