South Korea elects Lee Jae-myung as president; crypto-friendly politician promises Bitcoin ETFs and won-pegged stablecoins to curb capital flight.

Summary

  • Lee Jae-myung won the early elections in South Korea following the impeachment of the former president due to martial law.

  • He promised to legalize Bitcoin ETFs and launch a stablecoin pegged to the won to curb capital flight.

  • The inauguration is set for July 17, with Lee promising investments in AI and semiconductors, as well as a shorter workweek.

South Korea, a country shaken by martial law just six months ago, elected a new leader with plans for cryptocurrency reform.

Lee Jae-myung, leader of the Democratic Party of South Korea, was inaugurated as president on Wednesday (4), after securing a decisive victory in the early elections on June 3.

With 99% of votes counted, Lee received 49.42% of the votes, competing with 41.15% for Kim Moon-soo, amid a historic voter turnout of 79.4%, the highest since 1997.

The early election in South Korea occurred as a result of the impeachment of former President Yoon Suk-yeol in December for declaring martial law in a failed power grab that paralyzed the country's legislature.

Lee, who narrowly lost to Yoon in 2022, used that previous campaign to experiment with NFTs featuring his image and promises in an effort to connect with younger voters.

In his latest attempt, he expanded on these ideas, promising to legalize spot Bitcoin exchange-traded funds (ETFs) and launch a stablecoin pegged to the won, the South Korean currency, to prevent capital flight.

"We need to establish a stablecoin market backed by the won to prevent national wealth from leaking abroad," he said during a policy forum in May.

"With Lee Jae-myung now elected, the likelihood of seeing a spot ETF approved has increased significantly," said Min Jung, an analyst at Presto Research, to Decrypt.

"It is somewhat ironic that South Korea — one of the most crypto-friendly countries in the world — is still behind competitors like the US and Hong Kong in this regard," said Jung.

However, Jung warned that other initiatives, such as the launch of a stablecoin, "will require more careful deliberation, particularly regarding regulatory frameworks, monetary policy coordination, and technical implementation."

In the first quarter of 2025, South Korean exchanges transacted $40.6 billion in cryptocurrencies abroad, almost half in stablecoins like USDT and USDC, raising concerns about capital outflows that the proposed won-pegged stablecoin by Lee aims to contain.

Lee's full inauguration will take place on July 17, Constitution Day, in a symbolic "Nomination Ceremony" that, according to his office, reflects his belief that "the people nominate the president."

In addition to cryptocurrencies, Lee promised a "pragmatic and market-oriented" economic policy that includes investments in AI, semiconductors, and defense technology, according to a report by Yonhap News.

He also advocates for a four-and-a-half-day workweek, greater support for small businesses, tax deductions for families, and expansion of elderly care services.

Former President Yoon, once hailed as a pro-cryptocurrency reformer, promised to deregulate the sector in 2022 but achieved little during his term.

His administration faced resistance from the Financial Services Commission (FSC), and his term ended amid a political crisis and freezing of key cryptocurrency accounts.