Nearly a third of South Korea's population is involved in cryptocurrency trading, with 16 million holders surpassing the number of domestic stock investors.
On that strange night in December 2024, former President Yun Suk-yeol declared military control, deployed troops to the National Assembly, and even attempted to take military action against North Korea. He probably never imagined that this political suicide-like farce would lead to one of the world’s most radical cryptocurrency policy agendas.
[The rest of the translation continues in the same professional manner, keeping the original meaning and tone intact while translating into Vietnamese. All specific terms such as Foresight News, Block, Circle, Tether, USDT, TRON, ETH, HT, USDC, RON, and ONG are kept intact.]
Institutional transformation
In 2017, South Korea implemented restrictions that prohibited companies, institutions, and financial businesses from opening cryptocurrency trading accounts due to concerns about speculation and money laundering. Only individuals can use real-name verified accounts to trade cryptocurrencies. Institutional and corporate accounts are prohibited, and banks face strict compliance obligations. The current government has begun a gradual process to lift these restrictions.
In the first phase (mid-2025), non-profit organizations and some public agencies are now allowed to convert cryptocurrencies received through donations or confiscations into cash, provided they meet strict compliance requirements, such as using real-name verified trading accounts in Korean won and establishing internal audit committees.
By the end of 2025, the government will expand eligibility to open cryptocurrency trading accounts to about 3,500 listed companies and professional institutional investors through pilot projects. These accounts must be real-name verified and comply with strict anti-money laundering (AML) and KYC procedures. Financial regulators have announced that listed companies will eventually be allowed to directly engage in cryptocurrency trading, which will spur large-scale adoption at the enterprise level.
Major domestic exchanges have launched or upgraded “institutional-grade” products, custody solutions and support services to meet the growing potential demand from large enterprises and professional investors.
Currently, traditional financial institutions such as banks, asset management firms, and brokerages are still excluded from direct cryptocurrency trading. This setup ensures that the first wave of institutional cryptocurrency activity in South Korea will be led by non-financial businesses, potentially giving them a competitive advantage as regulatory doors open wider.
Political recognition
Lee Jae-myung’s crypto agenda has received broad political support, not limited to his own Democratic Party. In recent campaigning activities, both major parties have promised to legalize crypto ETFs, a rare moment of bipartisan consensus in South Korean politics. The Financial Services Commission, which previously opposed discussion of crypto ETFs, has now submitted a roadmap to approve Bitcoin and Ethereum spot ETFs by the end of 2025.
This political shift reflects the emergence of cryptocurrencies as a major voter issue. South Korea’s more than 16 million cryptocurrency holders account for about a third of the total population, transforming digital asset policy from a niche technical issue to a mainstream political topic.
The government has also taken broader measures to support crypto businesses. The Ministry of Small and Medium Enterprises and Startups has announced plans to remove restrictions that no longer prevent crypto companies from obtaining venture capital status, allowing them to enjoy significant tax benefits, including a 50% reduction in corporate income tax for five years and a 75% reduction in real estate purchase tax.
South Korean investors have responded enthusiastically to these policy developments. Stablecoin trademark applications have triggered a significant rally in bank stocks. Kakao Bank shares rose 19.3% the day after filing a cryptocurrency-related trademark application, while KB Financial Group shares rose 13.38% following a similar application.
More notably, in June 2025, Korean retail investors invested nearly $450 million in Circle Group shares, making it the most sought-after foreign stock that month. Since its listing in June, Circle shares have surged more than 500%, as Korean investors view it as an indicator of global stablecoin applications.
This investment model reflects investors' deep understanding of how South Korea's stablecoin policy could drive global demand for stablecoin infrastructure. South Korean investors are positioning themselves for South Korea's potential influence on the global digital asset market.
Lee Jae-myung’s cryptocurrency strategy faces significant external pressure. US President Donald Trump has threatened to impose retaliatory tariffs of up to 50%, which could severely impact South Korea’s export-dependent economy. With exports accounting for 40% of GDP, trade disruptions could trigger an economic downturn in which cryptocurrency funds would be restricted regardless of regulatory sophistication.
The urgency of the moment has created a race between policy implementation and economic recession. South Korean authorities are rushing to establish cryptocurrency infrastructure to prevent potential trade conflicts from making the economic environment too difficult and hindering new investment initiatives.
Domestically, the central bank’s opposition to private stablecoins could create continued regulatory tensions. South Korean banking officials prefer to keep stablecoin issuance under the supervision of the banking sector rather than allowing tech companies to get involved in monetary infrastructure areas.
Tax policy is yet to be determined. The planned 20% capital gains tax on cryptocurrency income exceeding 2.5 million Korean won per year has been postponed several times but is still expected to be implemented. How this tax interacts with new corporate cryptocurrency access rules will affect institutional application models.
The global impact of South Korea’s cryptocurrency policy is being closely watched by the international community, with the potential to serve as a template for other countries facing similar economic pressures and technology adoption models. The combination of clear regulation, institutional outreach, and domestic stablecoin infrastructure makes for a comprehensive approach to digital asset integration.
If successful, the South Korean model could influence policymaking in other Asian economies and provide a template for countries looking to embrace digital asset innovation while maintaining monetary sovereignty.
