Cryptocurrency Has Emerged as a Defining Issue in South Korea's Snap Presidential Election

Cryptocurrency has emerged as a defining issue in South Korea's snap presidential election, with candidates vying for support from a growing base of digital asset investors across generations.

Cryptocurrency has emerged as a defining issue in South Korea’s snap presidential election, with candidates vying for support from a growing base of digital asset investors across generations.

All three front-runners have rolled out crypto-friendly proposals. These include the legalization of spot Bitcoin (BTC) exchange-traded funds (ETFs) and the easing of banking rules that currently restrict fiat-to-crypto trading to just five platforms.

The June 3 vote is slated to come around two years early, triggered by the impeachment of former president Yoon Suk-yeol after his controversial declaration of martial law in late 2024. Though quickly overturned by lawmakers, the abrupt power grab led to a political crisis and his eventual removal from office.

Yoon’s 2022 campaign leaned heavily on promises to reform crypto regulations — largely aimed at younger voters. This time, the political focus on digital assets has only intensified, as older generations begin to pour significant wealth into digital assets.

Presidential election debate clash on stablecoins

This election has three leading candidates, and all of them have promised to advance the local crypto economy.

Lee Jae-myung of the opposing Democratic Party lost to Yoon in the last election and returns with a second crypto-friendly campaign.

Kim Moon-soo is running under the current ruling party, the People Power Party (PPP). Former president Yoon has distanced himself from the PPP ahead of the election, leaving Kim to define a new direction for the fractured conservative base.

Lee Jun-seok was once the youngest-ever leader of the PPP. He is now leading his own newly formed Reform Party, a minor party he founded in January 2024 after splitting with the ruling bloc.

“The political sphere has actively embraced [cryptocurrencies] as a key campaign agenda,” Park Sung-jun, head of the Blockchain Research Center at Dongguk University, told Cointelegraph.

Lee Jae-myung and Kim have both pledged to ease strict banking rules that require crypto exchanges to partner with licensed banks to offer fiat services — a system that has created a near-monopoly of just five approved platforms. The structure in place excludes corporate participation, as it requires users to open accounts at partner banks using their legal identities.

Lee has also proposed launching a stablecoin pegged to the won to reduce reliance on tokens issued abroad.

Related: South Korean crypto emerges from failed coup into crackdown season

Lee Jun-seok pushed back, noting that South Korea once had a won-pegged algorithmic stablecoin, TerraKRW (KRT), part of the Terra ecosystem that suffered a multibillion-dollar collapse.

“Lee Jae-myung proposes launching another stablecoin without presenting any safeguards. What assets will back it? How will market risks be handled? How will we avoid repeating past failures? There are no answers,” Lee Jun-seok said in a Facebook post, criticizing his opponent for turning stablecoins into a “slogan.”

The two candidates clashed again on stablecoins during a live debate, where Lee Jae-myung argued for the safety of centralized and fiat-backed stablecoins.

Lee Jae-myung was the opponent of former president Yoon in the 2022 election, when he also championed crypto-friendly policies. However, he was less aggressive than Yoon, who made several pro-crypto pledges. Some of them, like lifting bans on play-to-earn (P2E) gaming and initial coin offerings, were never implemented.

Lee Jun-seok reportedly called gaming South Korea’s “second semiconductor industry,” which made up more than a fifth of the country’s total exports in 2024. He pledged to target 10% of the global gaming market through regulatory support in taxation, exports and talent development. He added that regulations that dismiss blockchain-based P2E games accelerate the exodus of creative industries.

P2E games remain banned under local regulations, but interest has recently surged among investors following the launch of a new title by Nexon, one of South Korea’s biggest game developers, along with a new cryptocurrency tied to its in-game economy.

Crypto promises test old and new voter bases

South Korea had 9.7 million Know Your Customer-verified crypto investors by the end of 2024, a 25% increase from the first half of the year, according to the Financial Intelligence Unit (FIU). Investors in their 30s saw the biggest growth, up 29%, followed by those in their 40s (27%), while investors over 50 increased by 25%.

The FIU’s findings show that older investors have larger holdings. By year-end, 221,000 investors held at least 100 million won (about $73,000) in crypto. Of those, 172,500 — or 78% — were over