Lee Jae-myung Archives - Coin Engineer

South Korea Halts CBDC Trials as Banks Chase Stablecoin Boom

Yigit Taha OZTURK — Mon, 30 Jun 2025 13:00:09 +0000

As decentralized finance rapidly evolves, South Korea—a leading tech hub in Asia—is witnessing a dramatic pivot. The country’s ambitious digital currency project has hit the brakes, as local banks eye more lucrative stablecoin opportunities.

The Bank of Korea has officially paused the second phase of its central bank digital currency (CBDC) tests. Initiated in April, these tests were meant to evaluate the use of a digital won in real-world payments. However, recent government support for stablecoins appears to have shifted the momentum.

High Costs and No Clear Plan Push Banks Away

Sources from the seven participating banks say the CBDC project was already “on the verge of collapse.” The main reason? High costs and lack of a clear commercialization roadmap. Though over 100,000 users joined the initial trial, banks argue there’s little incentive to continue without policy clarity.

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Meanwhile, the government, under newly elected President Lee Jae-myung, is actively promoting stablecoins. A new bill tabled this month allows companies to issue Korean won-pegged stablecoins with a minimum capital of 500 million won (about $370,000). That legislation is quickly reshaping the country’s crypto landscape.

Won-Pegged Stablecoin Initiative Gains Traction

Eight major South Korean banks are now forming an alliance to launch a won-backed stablecoin by 2025. This group includes several CBDC trial participants: KB Kookmin, Shinhan, Woori, and NongHyup.

The move signals a significant shift in strategy. Banks appear more interested in building independent crypto products that offer tangible revenue streams rather than supporting costly central bank projects.

Following the announcement, local fintech stocks reacted swiftly. KakaoPay fell 7%, Hecto Financial dropped 5%, while KB Financial Group and Shinhan saw slight gains of 0.8% and 1.6%, respectively.

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South Korea’s Central Bank Open to Stablecoin, But Warns of Forex Risk

Yigit Taha OZTURK — Fri, 20 Jun 2025 10:00:17 +0000

The governor of South Korea’s central bank, Rhee Chang-yong, stated he is not opposed to issuing a won-pegged stablecoin, but expressed concern about its implications on foreign exchange management.

Speaking at a press conference, Rhee told Reuters:

“Issuing a won-based stablecoin could make it easier to exchange with dollar stablecoins rather than reducing reliance on them. That could increase dollar stablecoin demand and make forex management difficult for us.”

These remarks come as newly elected President Lee Jae-myung pushes ahead with promised crypto regulation and amid a decline in the country’s forex reserves.

Declining Forex Reserves

Data from the Bank of Korea shows that forex reserves dropped from $415.6 billion in December to $404.6 billion by the end of May — a decrease of $11 billion in six months.

New Crypto Framework Proposed

On June 10, the ruling Democratic Party introduced the Digital Asset Basic Act, which would allow companies with at least $368,000 in equity to issue stablecoins, pending Financial Services Commission (FSC) approval and sufficient reserves for refunds.

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The FSC is also investigating South Korean exchanges’ trading fees, aligning with President Lee’s promise to lower costs for young investors.

Non-Dollar Stablecoins on the Rise

While US dollar-backed stablecoins dominate the market, Circle’s euro-pegged EURC has seen a 156% surge in market cap this year, reaching $203 million.

Circle’s stock rose sharply after U.S. lawmakers expressed support for the GENIUS Act, a proposed stablecoin regulation bill expected to pass the House.

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South Korea Moves To Legalize Stablecoins With Bold Crypto Bill

Yigit Taha OZTURK — Tue, 10 Jun 2025 07:30:53 +0000

In a region already buzzing with digital innovation, South Korea is positioning itself to become a dominant force in the crypto economy. A shift in political leadership has triggered a wave of regulatory reform that could reshape the market entirely.

New President Acts Fast On Stablecoin Promise

Following his recent election win, President Lee Jae-myung has wasted no time delivering on campaign pledges around crypto. His ruling Democratic Party has introduced the “Digital Asset Basic Act,” aiming to permit the issuance of domestic stablecoins and foster a transparent, competitive crypto landscape.

Under the proposal, local companies will be allowed to issue stablecoins if they have a minimum equity capital of 500 million won ($368,000). Issuers must also maintain reserves to back the coins and receive approval from the Financial Services Commission, South Korea’s top financial regulator.

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The legislation seeks to legitimize stablecoin markets and drive broader adoption by ensuring regulatory clarity and investor protection.

Crypto Gains Mass Appeal Across South Korea

Interest in Bitcoin and stablecoins has soared in South Korea. In Q1 of 2024 alone, transactions involving major U.S. dollar stablecoins totaled 57 trillion won ($42 billion) across the country’s five leading exchanges, according to Bank of Korea data.

An estimated one-third of the South Korean population—around 18 million people—is now involved in the crypto market. Building on this momentum, President Lee is also pushing for Bitcoin ETF approvals and the inclusion of Bitcoin in the national pension fund’s investment strategy.

However, these ambitions face resistance from the Bank of Korea, which argues that private stablecoins could undermine the effectiveness of monetary policy.

Crypto Law Boosts Stocks, But Not Without Skepticism

Anticipation around the bill has already impacted financial markets. Shares in digital wallet provider KakaoPay surged up to 45% in five days following the announcement. Still, JPMorgan analysts caution that the rally may be premature, with real benefits from the legislation yet to materialize.

Despite the uncertainty, South Korea’s proactive legislative push sets a bold precedent in Asia’s ongoing crypto regulatory race.

The post South Korea Moves To Legalize Stablecoins With Bold Crypto Bill appeared first on Coin Engineer.

Crypto-Friendly Winds Sweep South Korea As New President Takes Office

Yigit Taha OZTURK — Wed, 04 Jun 2025 10:00:41 +0000

In a country known for its technological edge and fast-moving markets, South Korea has taken a bold political leap. The ripple effects are expected to reach deep into the global crypto industry.

Lee Jae-myung Wins With Pro-Crypto Agenda

Opposition leader Lee Jae-myung has officially taken office as president after winning a snap election on June 3. The vote came amid political chaos, triggered by former president Yoon Suk-yeol’s declaration of martial law.

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Lee’s victory came on the back of a strong pro-crypto platform: legalizing Bitcoin ETFs, allowing the $884 billion national pension fund to invest in crypto, and launching a Korean won-backed stablecoin.

During a policy discussion in May, Lee emphasized:

“We must establish a won-backed stablecoin market to prevent national wealth from leaking overseas.”

Historic Voter Turnout Fuels Momentum

Nearly 80% of eligible voters cast their ballots—South Korea’s highest turnout since 1997. Lee secured over 49% of the vote, defeating conservative rival Kim Moon-soo.

Following the announcement, Bitcoin surged on local exchanges like Bithumb and Upbit, reaching 149,000 won (~$108,480), about 2% higher than global averages due to the so-called kimchi premium.

Crypto Promises Amid Broader Reforms

Although crypto was a major theme of Lee’s campaign, he faces numerous national challenges: economic hardship, geopolitical tensions, and an urgent need for institutional reform.

Lee has pledged to focus on economic revival via AI and defense investments, judicial neutrality, and societal modernization—including introducing a 4.5-day workweek.

Whether or not Lee delivers on his crypto promises, the market is watching—closely.

The post Crypto-Friendly Winds Sweep South Korea As New President Takes Office appeared first on Coin Engineer.

Won-Pegged Stablecoin Proposal Gains Ground in South Korea

Emre Yumlu — Tue, 20 May 2025 13:00:08 +0000

As South Korea gears up for its upcoming presidential election, crypto-related policies have once again become a key topic in national debates. Presidential candidate and Democratic Party leader Lee Jae-myung has proposed the development of a stablecoin tied to the Korean won, aiming to prevent capital flight and bolster the country’s digital financial infrastructure.

Local Stablecoin as a Tool for Financial Sovereignty

During a recent policy discussion, Lee emphasized that a won-backed stablecoin could reduce South Korea’s reliance on foreign-issued stablecoins such as USDT and USDC. He believes this initiative would help retain domestic capital and protect national wealth from flowing out of the country.

Current regulations in South Korea prohibit the issuance of domestic stablecoins, forcing local exchanges to depend on USD-pegged digital assets. Between January and March 2025, approximately 56.8 trillion won (roughly $40.8 billion) left domestic exchanges, a large portion of which was linked to foreign stablecoins.

To counter this trend, Lee advocates for a stronger national framework that would enable digitally sovereign financial tools.

Broader Crypto Agenda: ETFs and Pension Fund Access

Lee’s vision for digital assets goes beyond just stablecoins. His platform includes legalizing spot crypto ETFs, allowing institutional players and public pension funds to invest in crypto once certain price stability standards are met. He also supports lower transaction fees and establishing a comprehensive government-led monitoring system.

However, these proposals have raised concerns among economists. Shin Bo-sung, a senior researcher at the Korea Capital Market Institute, warned that large-scale adoption of stablecoins might lead to excessive money supply growth and potentially shift monetary control into the hands of private entities.

New Legal Framework for Digital Assets

To address regulatory uncertainty, the Democratic Party recently launched a Digital Asset Committee, which held its first session at the National Assembly in Seoul on May 13. The committee aims to develop clear policies and foster sustainable growth within the crypto industry.

An upcoming legislative proposal titled the “Digital Asset Basic Act” is also on the agenda. This law would set out detailed rules for stablecoin issuance, requiring issuers to hold reserves of at least 50 billion won and receive approval from financial regulators.

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.

The post Won-Pegged Stablecoin Proposal Gains Ground in South Korea appeared first on Coin Engineer.