🚀 Korean Markets Explode as President Lee Bets Big on Won-Backed Crypto – Kakao Pay Rockets 100%
Seoul's financial markets just got a crypto-powered adrenaline shot.
The Lee Effect: How a Presidential Pledge Ignited the Rally
South Korea's benchmark index surged after President Lee doubled down on plans to stabilize cryptocurrencies using the national currency. The won-backed digital asset proposal sent shockwaves through traditional finance circles—much to the dismay of short-sellers.
Kakao Pay's Meteoric Rise
The real action happened in fintech stocks, with mobile payment giant Kakao Pay delivering a masterclass in volatility. Shares doubled as retail investors piled in, proving once again that nothing moves markets like politicians playing central banker.
The Institutional Dilemma
While Seoul's retail traders celebrate, traditional asset managers face an existential question: adapt to crypto or risk becoming irrelevant. Meanwhile, Goldman Sachs analysts were reportedly seen frantically rewriting their "blockchain is a fad" research notes from 2022.
One thing's clear—when politicians start making crypto policy, hold onto your wallets. The only thing more volatile than the markets? Political promises about stabilizing them.
Kospi Stock Soars 30% YTD, Crowned Korea’s Best-Performing Market in H1 2025
The rally has pushed South Korea’s Composite Stock Price Index or KOSPI up almost 30% this year, lifting it to NEAR four-year highs and making it Asia’s top-performing market for the first half of 2025.
Retail investors have flocked to the rally, with outstanding margin loans swelling to Won20.5 trillion ($15 billion), data from the Korea Financial Investment Association shows.
Despite the euphoria, the government has yet to reveal specific policies for won-based stablecoins, leaving the market to trade on expectations fueled by President Lee’s appointment of Kim Yong-beom, a well-known digital asset advocate, as his chief policy adviser.
Momentum has been further supported by a bill introduced by the ruling party this month, proposing to allow companies with as little as Won500 million in equity to issue won-based stablecoins.
Critics warn this could expose the financial system to undercapitalized players and heighten systemic risks.
Kakao Pay, Kakao Entertainment, Kakao Corp.
All holding $KAIA. All active in @KaiaChain governance.
Now: a KRW stablecoin trademark filed by Kakao Pay.
Coincidence? pic.twitter.com/5AybAx0zIJ
South Korea, home to one of the world’s most active crypto markets, saw trading in dollar-pegged stablecoins hit Won57 trillion in the first quarter alone, increasing pressure on the Bank of Korea to accelerate its own digital currency rollout.
Banks, brokerages, and fintech firms are eager to enter the stablecoin space but remain wary of forthcoming regulations.
Bank of Korea governor Rhee Chang-yong has voiced concerns about stablecoins issued by non-bank entities, highlighting risks to capital flows and monetary policy.
The central bank plans to consult major lenders on a second pilot for its digital currency.
Korea’s FSC Eyes Spot Crypto ETFs
As reported, South Korea’s Financial Services Commission (FSC) has presented a roadmap to the Presidential Committee on Policy Planning proposing the approval of spot crypto ETFs.
The MOVE came after President Lee Jae-myung’s campaign promise to modernize digital asset rules and boost opportunities for younger investors.
The plan outlines implementation measures for spot crypto ETFs and regulatory frameworks for won-based stablecoins in the second half of 2025.
Historically, the FSC blocked crypto ETFs over volatility and financial risk concerns, maintaining that cryptocurrencies were unsuitable as underlying assets.
