South Korea’s cryptocurrency industry may see changes depending on the outcome of June 2 presidential election.

Both leading candidates, liberal Lee Jae-myung and conservative Kim Moon-soo, have proposed pro-crypto policies.

The country has a highly active crypto market, with trading turnover sometimes exceeding that of the Kospi and Kosdaq.

By the end of 2024, South Koreans held digital assets worth about 104 trillion won (US$74.5 billion), according to the Bank of Korea.

Both candidates aim to ease regulations and expand access to digital assets.

Lee proposes legalizing spot crypto ETFs and allowing the national pension fund to invest in cryptocurrencies. Kim supports similar initiatives.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ South Korea’s crypto transformation reflects deeper economic factors

South Korea’s evolution into a crypto powerhouse is rooted in specific national circumstances rather than random chance.

The country accounts for approximately 30% of global cryptocurrency trading despite having less than 1% of the world’s population 1.

This participation stems from cultural factors including a strong digital goods economy (over $3 billion spent in the Google Play store in 2017 alone) and an exceptionally high internet penetration rate of 93% 1.

The motivation driving crypto adoption goes beyond speculation. It reflects deeper socioeconomic concerns, particularly among younger Koreans seeking financial mobility in a society with limited traditional pathways to wealth 2.

The “Kimchi Premium” phenomenon, where cryptocurrency prices in South Korea traded higher than global markets in January 2018, demonstrates the unique demand dynamics created by capital controls limiting Koreans to $50,000 in annual overseas remittances 3.

2️⃣ Political evolution from crypto skepticism to bipartisan embrace

South Korea’s political stance on cryptocurrency has undergone a remarkable transformation over seven years, reflecting both global trends and domestic realities.