Veteran capital in crypto is shaping South Korea’s elections

3 weeks ago

Cryptocurrency has emerged arsenic a defining contented successful South Korea’s drawback statesmanlike election, with candidates vying for enactment from a increasing basal of integer plus investors crossed generations.

All 3 front-runners person rolled retired crypto-friendly proposals. These see the legalization of spot Bitcoin (BTC) exchange-traded funds (ETFs) and the easing of banking rules that presently restrict fiat-to-crypto trading to conscionable 5 platforms.

The June 3 ballot is slated to travel astir 2 years early, triggered by the impeachment of erstwhile president Yoon Suk-yeol aft his arguable declaration of martial law successful precocious 2024. Though rapidly overturned by lawmakers, the abrupt powerfulness drawback led to a governmental situation and his eventual removal from office.

Yoon’s 2022 run leaned heavy connected promises to betterment crypto regulations — mostly aimed astatine younger voters. This time, the governmental absorption connected integer assets has lone intensified, arsenic older generations statesman to determination important wealthiness into integer assets.

Presidential predetermination statement clash connected stablecoins

This predetermination has 3 starring candidates, and each of them person promised to beforehand the section crypto economy.

Lee Jae-myung of the opposing Democratic Party mislaid to Yoon successful the past predetermination and returns with a 2nd crypto-friendly campaign.

Kim Moon-soo is moving nether the existent ruling party, the People Power Party (PPP). Former president Yoon has distanced himself from the PPP up of the election, leaving Kim to specify a caller absorption for the fractured blimpish base.

Lee Jun-seok was erstwhile the youngest-ever person of the PPP. He is present starring his ain recently formed Reform Party, a insignificant enactment helium founded successful January 2024 aft splitting with the ruling bloc.

“The governmental sphere has actively embraced [cryptocurrencies] arsenic a cardinal run agenda,” Park Sung-jun, caput of the Blockchain Research Center astatine Dongguk University, told Cointelegraph.

“Driven by the modulation to a integer economy, the propulsion for transparency successful governmental funding, the dispersed of blockchain-based governmental information technologies and increasing demands for capitalist protection, [crypto] has emerged arsenic a important economic, societal and governmental contented successful South Korea.”

Lee Jae-myung and Kim person some pledged to easiness strict banking rules that necessitate crypto exchanges to spouse with licensed banks to connection fiat services — a strategy that has created a near-monopoly of conscionable five approved platforms. The operation successful spot excludes firm participation, arsenic it requires users to unfastened accounts astatine spouse banks utilizing their ineligible identities.

Lee has besides projected launching a stablecoin pegged to the won to trim reliance connected tokens issued abroad.

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

“Lee Jae-myung proposes launching different stablecoin without presenting immoderate safeguards. What assets volition backmost it? How volition marketplace risks beryllium handled? How volition we debar repeating past failures? There are nary answers,” Lee Jun-seok said successful a Facebook post, criticizing his hostile for turning stablecoins into a “slogan.”

The 2 candidates clashed again connected stablecoins during a unrecorded debate, wherever Lee Jae-myung argued for the information of centralized and fiat-backed stablecoins.

Lee Jae-myung was Yoon’s hostile successful the 2022 predetermination erstwhile helium besides championed crypto-friendly policies. However, helium was little assertive than Yoon, who made respective pro-crypto pledges. Some of them, similar lifting bans connected play-to-earn (P2E) gaming and archetypal coin offerings, were ne'er implemented.

Lee Jun-seok reportedly called gaming South Korea’s “second semiconductor industry,” which made up much than a 5th of the country’s full exports successful 2024. He pledged to people 10% of the planetary gaming marketplace done regulatory enactment successful taxation, exports and endowment development. He added that regulations that disregard blockchain-based P2E games accelerate the exodus of originative industries.

P2E games stay banned nether local regulations, but involvement has precocious surged among investors pursuing the motorboat of a new rubric by Nexon, 1 of South Korea’s biggest crippled developers, on with a caller cryptocurrency tied to its in-game economy.

Crypto promises trial aged and caller elector bases

South Korea had 9.7 cardinal Know Your Customer-verified crypto investors by the extremity of 2024, a 25% summation from the archetypal fractional of the year, according to the Financial Intelligence Unit (FIU). Investors successful their 30s saw the biggest growth, up 29%, followed by those successful their 40s (27%), portion investors implicit 50 accrued by 25%.

The FIU’s findings amusement that older investors person larger holdings. By year-end, 221,000 investors held astatine slightest 100 cardinal won (about $73,000) successful crypto. Of those, 172,500 — oregon 78% — were implicit 40.

In February, the caput of the fiscal manufacture relation urged regulators to o.k. Bitcoin and Ether ETFs, citing rising request among older investors. He argued that ETFs connection safer vulnerability than nonstop investment.

The support of Bitcoin ETFs has been a cardinal run pledge for some Lee Jae-myung and Kim. The determination follows increasing planetary momentum aft the US, the world’s largest marketplace and a cardinal South Korean trading partner, gave the greenish airy to spot Bitcoin ETFs successful aboriginal 2024.

“Cryptocurrencies play a definite relation successful our society, but they are yet 1 of the planetary trends. As the US took the lead, we’ve ended up pursuing successful its footsteps. It’s a spot disappointing — we could person taken the pb ourselves,” Cho Jaewoo, adjunct prof of societal subject astatine Hansung University, told Cointelegraph.

However, the nation’s Capital Markets Act is simply a obstruction that does not admit crypto arsenic eligible assets underlying ETFs. The Financial Services Commission (FSC) is besides reviewing ineligible pathways to let Bitcoin ETFs nether its dedicated crypto committee.

Lee up successful statesmanlike predetermination elector survey

Yoon’s failed coup accelerated the statesmanlike predetermination and brought renewed urgency to unresolved issues successful the section crypto industry.

“In the 2022 statesmanlike election, cryptocurrency was viewed arsenic speculative and untrustworthy. But by the 2025 election, it had emerged arsenic a cardinal argumentation issue, with large candidates pushing for institutionalization and fiscal productization successful effect to the concern realities faced by young people,” Park from Blockchain Research Center said.

South Korea is 1 of the world’s largest crypto markets. In Q1 2024, the Korean won ranked arsenic the most-traded fiat currency against crypto, driven mostly by retail investors. Institutional players stay connected the sidelines, awaiting their crook arsenic the FSC prepares to motorboat aviator trading for nonrecreational investors.

Crypto policies were erstwhile seen arsenic run strategies to sway younger voters, but this year, they’re seen arsenic an economical and societal contented that impacts aggregate generations. In this election, older generations are entering the integer sphere, accelerating calls for regulated concern vehicles, specified arsenic ETFs.

“Things person changed a lot. There were adjacent questions and answers astir virtual assets during the statesmanlike debates, and related discussions look to beryllium overmuch much active. In the past, radical looked astatine it with skepticism, but present it feels similar the nationalist is approaching it much neutrally and making their ain judgments,” Cho said.

Lee Jae-myung and Kim are the 2 starring candidates, according to section media surveys, with Lee starring Kim astatine 44.9% to 35.9%, according to a survey conducted from May 23 to 25. Lee Jun-seok is acold down astatine 9.6%, though helium gained astir 3% from the preliminary survey conducted a week prior.

The 21st statesmanlike predetermination is scheduled to instrumentality spot connected June 3.

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