South Korea Plots Won-Pegged Stablecoin to Stop Crypto Capital Exodus

Seoul’s latest move? A government-backed stablecoin tied to the Korean Won—aimed at plugging the leaky bucket of crypto-fueled capital flight. Because nothing says ’trust us’ like a centralized solution to decentralized problems.

Regulators are scrambling as locals bypass strict FX rules via USDT and other offshore stablecoins. The proposed digital Won would offer a compliant on-ramp—while keeping liquidity trapped in the domestic market. Classic financial gatekeeping with a blockchain veneer.

Will it work? Depends who you ask. Traders love the convenience of global stablecoins, bureaucrats love control. Place your bets—just don’t try moving your profits overseas.

Crypto takes center stage in South Korea’s presidential elections

Meanwhile, his rival Kim Moon-soo is no exception as he too has expressed strong support for legalizing spot crypto ETFs. This is a sign of a broader transformation in the nation’s financial strategy.

While some speculate this focus may be inspired by recent U.S. developments, there is no proof to back it. Instead, this MOVE highlights that South Korea might be charting its own course in crypto policy.

Central to both candidates’ agendas is the push to legalize spot crypto ETFs, enabling assets like Bitcoin [BTC] to trade on South Korean stock exchanges.

Lee Keun-ju, Head of the Korea Fintech Industry Association, has praised these efforts, viewing them as a positive step towards mainstreaming digital assets in the country’s financial markets.

Keun-ju said, 

“A bitcoin spot ETF is not simply a product. It can be the gateway to broadening the connection between the digital asset ecosystem and the capital market.”

Additionally, he has proposed establishing a Won-backed stablecoin market to help curb capital flight strategically.

Remarking on the same, in a recent policy discussion with YouTubers dealing with economic issues last week, Ju added, 

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

Other candidates are also vouching for the same

Echoing similar views, Han Dong-hoon, another leading presidential candidate, recently called for deregulating crypto and green-lighting Bitcoin ETFs.

For those unaware, in a recent interview, Han shared his vision for a more welcoming crypto environment in South Korea, indicating a shift away from previously stringent policies.

Han said, 

“Cryptocurrency regulations should be relaxed. South Korea should be at the center [of crypto innovation].”

Now, to back these initiatives, the government is set to introduce the Digital Asset Basic Act. It aims to establish a comprehensive legal framework for cryptocurrencies in Korea.

This legislation will address key aspects such as stablecoin regulations and the issuance, trading, and oversight of digital assets. If enacted, it could pave the way for a more transparent, equitable, and progressive financial system in the country.

Thus, with these rapid developments and a clear shift in political mindset, South Korea may soon set a precedent for other nations. Especially those once critical of crypto, to begin embracing digital assets in their own financial frameworks.