- Main event led by Lee Jae-myung.
- Aims to curb foreign stablecoin reliance.
- Significant implications for South Korea’s crypto market.
Main Content
South Korea seeks monetary independence from foreign stablecoins through a new
won-pegged coin, with significant implications for capital outflows and market stability.
The announcement by Democratic Party leader Lee Jae-myung marks a strategic push to
reduce capital outflows linked to foreign stablecoins.
He proposed a stablecoin fully backed and pegged to the Korean won. Lee,
with a history in politics and technology integration, highlights a change in strategy for
South Korea. The proposal includes a ‘one-to-one reserve system’ for stability.
The Bank of Korea
supports early regulatory involvement, indicating institutional backing for this proposed digital
asset. The proposed stablecoin aims to reduce approximately 28.4 trillion won in
capital outflows attributed to foreign stablecoin usage by Korean users. Measures discussed include
monitoring stablecoin transactions and
reducing transaction fees.
USDT, a dominant player in Korea’s crypto market, faces direct competition, while
DeFi protocols and crypto-fiat onramps are likely to be impacted by this move.
Potential outcomes include fostering local crypto adoption and challenging USDT
dominance in Korea. Historical context shows no precedent for a government-backed
wonder-pegged stablecoin, signaling a major policy shift. Slow adoption or technical issues could emerge
as concerns, impacting both South Korea’s monetary policy and international crypto
relations. Opportunities for improved monetary independence and exchange regulation
arise, presenting challenges and advantages.
“The proposed system would rely on a ‘one-to-one reserve system’ to ensure stability.” — Lee Jae-myung, Leader of South Korea’s Democratic Party
