South Korea’s leading presidential candidate, Lee Jae-myung of the Democratic Party, has announced his intent to legalize spot Bitcoin exchange-traded funds (ETFs) and introduce broader crypto-friendly reforms if elected next month. The announcement comes amid growing interest in digital assets among young South Koreans and signals a potential shift in the country’s regulatory approach to the crypto industry.
His announcement, made on May 6, speaks directly to the country’s younger generation—many of whom are eager to invest in digital assets but face limited opportunities under the current regulatory setup.
Lee’s promise is clear: make it safer and easier for young Koreans to grow their wealth through crypto. “I will create a safe investment environment so that young people can build assets and plan for the future,” he said, according to The Korea Economic Daily.
So, what’s on the table? Legal spot crypto ETFs, lower trading fees, and stronger consumer protections. It’s part of a bigger strategy to modernize Korea’s investment landscape and meet growing demand for access to digital assets.
Political Landscape Shifts Toward Crypto
Lee’s pledge comes just weeks ahead of the highly anticipated June 3 presidential election. According to a recent poll conducted by Korea’s National Barometer Survey from April 24 to 30, Lee leads with 42% support. The next closest contender, acting President Han Duck-soo, trails at 13%.
This is the first time Lee has publicly addressed cryptocurrency policy as part of his presidential platform. However, his Democratic Party had previously included similar measures, including support for crypto ETFs, in its 2024 general election campaign. At the time, progress on such proposals stalled amid bureaucratic hurdles and regulatory caution.
In response to Lee’s announcement, the ruling People Power Party also reiterated its pro-crypto stance. In late April, the party unveiled its own set of policy proposals, including support for spot crypto ETFs, a regulatory framework for stablecoins, and the removal of South Korea’s controversial “one-exchange-one-bank” rule.
Dismantling Barriers: Reforming Korea’s Crypto Landscape
The one-exchange-one-bank rule currently limits crypto exchanges in South Korea to maintaining a banking partnership with only one financial institution. The rule, initially implemented to combat money laundering and improve user identity verification, has also been criticized for stifling competition and innovation in the crypto industry.
Removing this rule would give smaller exchanges more room to grow and provide Korean crypto investors with increased options and better services. As crypto adoption grows, with an estimated 16 million South Koreans—or around 31% of the population—reportedly holding crypto accounts, industry officials have increasingly called for more inclusive policies.
A Turbulent Political Backdrop
South Korea’s crypto-focused election campaigns are heating up—and they’re happening during a pretty chaotic time in the country’s politics. The ruling People Power Party is trying to clean up its image after a major scandal. Just last month, their former leader, President Yoon Suk Yeol, was impeached.
Yoon was kicked out of office after declaring martial law back in December—a move that shocked the nation. It led to massive protests and even caused the crypto markets to crash temporarily. Prices of Bitcoin, Ethereum, and other coins took a dive but bounced back quickly once the martial law was lifted, just six hours later.
Now, Kim Moon-soo has stepped in as the party’s new presidential candidate. Like his rival, Lee Jae-myung, Kim is all for spot Bitcoin ETFs and wants to modernize the country’s financial system. Still, the memory of Yoon’s dramatic exit is making it harder for the People Power Party to win back the trust of younger, crypto-savvy voters.
What’s at Stake
If Lee follows through on his crypto pledges, South Korea could become one of the first countries in Asia to legalize spot Bitcoin ETFs—following in the footsteps of the United States, which approved multiple spot Bitcoin ETFs in early 2024. Such a move could position Korea as a regional leader in digital finance and attract more institutional interest in the local crypto ecosystem.
However, the road ahead is uncertain. While public interest in crypto remains high, regulatory agencies in South Korea have historically taken a cautious stance, especially after the collapse of Terra (LUNA) in 2022 and subsequent scandals involving domestic exchanges.
To succeed, Lee will need to strike a balance between innovation and oversight—fostering a robust digital asset market without compromising investor protection or financial stability.
The Bottom Line
As South Korea heads into a crucial election, crypto has become more than just a talking point—it’s now a core issue shaping the future of financial policy. With both major parties trying to win over young, pro-crypto voters, the country could be on the brink of a significant shift in how it regulates digital assets.
Whether these campaign promises turn into real change remains to be seen. But one thing’s for sure: crypto is now a major part of the conversation in South Korean politics.