Cryptocurrency has emerged as a defining issue in South Korea’s snap presidential election, with candidates vying for support from a growing base of digital asset investors across generations.

All three front-runners have rolled out crypto-friendly proposals. These include the legalization of spot Bitcoin (BTC) exchange-traded funds (ETFs) and the easing of banking rules that currently restrict fiat-to-crypto trading to just five platforms.

The June 3 vote is slated to come around two years early, triggered by the impeachment of former president Yoon Suk-yeol after his controversial declaration of martial law in late 2024. Though quickly overturned by lawmakers, the abrupt power grab led to a political crisis and his eventual removal from office.

Yoon’s 2022 campaign leaned heavily on promises to reform crypto regulations — largely aimed at younger voters. This time, the political focus on digital assets has only intensified, as older generations begin to pour significant wealth into digital assets.

Presidential election debate clash on stablecoins

This election has three leading candidates, and all of them have promised to advance the local crypto economy.

Lee Jae-myung of the opposing Democratic Party lost to Yoon in the last election and returns with a second crypto-friendly campaign.

Kim Moon-soo is running under the current ruling party, the People Power Party (PPP). Former president Yoon has distanced himself from the PPP ahead of the election, leaving Kim to define a new direction for the fractured conservative base.

Lee Jun-seok was once the youngest-ever leader of the PPP. He is now leading his own newly formed Reform Party, a minor party he founded in January 2024 after splitting with the ruling bloc.

“The political sphere has actively embraced [cryptocurrencies] as a key campaign agenda,” Park Sung-jun, head of the Blockchain Research Center at Dongguk University, told Cointelegraph.

“Driven by the transition to a digital economy, the push for transparency in political funding, the spread of blockchain-based political participation technologies and growing demands for investor protection, [crypto] has emerged as a significant economic, social and political issue in South Korea.”

Lee Jae-myung and Kim have both pledged to ease strict banking rules that require crypto exchanges to partner with licensed banks to offer fiat services — a system that has created a near-monopoly of just five approved platforms. The structure in place excludes corporate participation, as it requires users to open accounts at partner banks using their legal identities.

Lee has also proposed launching a stablecoin pegged to the won to reduce reliance on tokens issued abroad.

Related: South Korean crypto emerges from failed coup into crackdown season

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

“Lee Jae-myung proposes launching another stablecoin without presenting any safeguards. What assets will back it? How will market risks be handled? How will we avoid repeating past failures? There are no answers,” Lee Jun-seok said in a Facebook post, criticizing his opponent for turning stablecoins into a “slogan.”

The two candidates clashed again on stablecoins during a live debate, where Lee Jae-myung argued for the safety of centralized and fiat-backed stablecoins.

Lee Jae-myung was Yoon’s opponent in the 2022 election when he also championed crypto-friendly policies. However, he was less aggressive than Yoon, who made several pro-crypto pledges. Some of them, like lifting bans on play-to-earn (P2E) gaming and initial coin offerings, were never implemented.

Lee Jun-seok reportedly called gaming South Korea’s “second semiconductor industry,” which made up more than a fifth of the country’s total exports in 2024. He pledged to target 10% of the global gaming market through regulatory support in taxation, exports and talent development. He added that regulations that dismiss blockchain-based P2E games accelerate the exodus of creative industries.

P2E games remain banned under local regulations, but interest has recently surged among investors following the launch of a new title by Nexon, one of South Korea’s biggest game developers, along with a new cryptocurrency tied to its in-game economy.

Crypto promises test old and new voter bases

South Korea had 9.7 million Know Your Customer-verified crypto investors by the end of 2024, a 25% increase from the first half of the year, according to the Financial Intelligence Unit (FIU). Investors in their 30s saw the biggest growth, up 29%, followed by those in their 40s (27%), while investors over 50 increased by 25%.

The FIU’s findings show that older investors have larger holdings. By year-end, 221,000 investors held at least 100 million won (about $73,000) in crypto. Of those, 172,500 — or 78% — were over 40.

Related: XRP and Solana race toward the next crypto ETF approval

In February, the head of the financial industry association urged regulators to approve Bitcoin and Ether ETFs, citing rising demand among older investors. He argued that ETFs offer safer exposure than direct investment.

The approval of Bitcoin ETFs has been a key campaign pledge for both Lee Jae-myung and Kim. The move follows growing global momentum after the US, the world’s largest market and a key South Korean trading partner, gave the green light to spot Bitcoin ETFs in early 2024.

“Cryptocurrencies play a certain role in our society, but they are ultimately one of the global trends. As the US took the lead, we’ve ended up following in its footsteps. It’s a bit disappointing — we could have taken the lead ourselves,” Cho Jaewoo, assistant professor of social science at Hansung University, told Cointelegraph.

However, the nation’s Capital Markets Act is a barrier that does not recognize crypto as eligible assets underlying ETFs. The Financial Services Commission (FSC) is also reviewing legal pathways to allow Bitcoin ETFs under its dedicated crypto committee.

Lee ahead in presidential election voter survey

Yoon’s failed coup accelerated the presidential election and brought renewed urgency to unresolved issues in the local crypto industry.

“In the 2022 presidential election, cryptocurrency was viewed as speculative and untrustworthy. But by the 2025 election, it had emerged as a key policy issue, with major candidates pushing for institutionalization and financial productization in response to the investment realities faced by young people,” Park from Blockchain Research Center said.

South Korea is one of the world’s largest crypto markets. In Q1 2024, the Korean won ranked as the most-traded fiat currency against crypto, driven largely by retail investors. Institutional players remain on the sidelines, awaiting their turn as the FSC prepares to launch pilot trading for professional investors.

Crypto policies were once seen as campaign strategies to sway younger voters, but this year, they’re seen as an economic and social issue that impacts multiple generations. In this election, older generations are entering the digital sphere, accelerating calls for regulated investment vehicles, such as ETFs.

“Things have changed a lot. There were even questions and answers about virtual assets during the presidential debates, and related discussions seem to be much more active. In the past, people looked at it with skepticism, but now it feels like the public is approaching it more neutrally and making their own judgments,” Cho said.

Lee Jae-myung and Kim are the two leading candidates, according to local media surveys, with Lee leading Kim at 44.9% to 35.9%, according to a survey conducted from May 23 to 25. Lee Jun-seok is far behind at 9.6%, though he gained almost 3% from the preliminary survey conducted a week prior. 

The 21st presidential election is scheduled to take place on June 3. 

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