This is what is at stake for crypto in the coming elections of South Korea

South Korea is preparing to choose a new president on 3 June. And although the elections can be more dominated by other issues in Korean politics, such as the recent accusation of the previous president, candidates have positioned digital assets as an important campaign issue in a nation where almost a third of citizens have a crypto.

Dr. Sangmin SEO, a South Korean technologist who leads the Kaia DLT Foundation, considers Crypto as more political instrumental.

“This election, Korean politics sees Crypto as a story to get the favors of voters and positions it as another national growth motor next to AI and semiconductors,” said SEO Decrypt.

“There is widespread support for the idea that the Korean Crypto industry cannot lose its competitiveness on the world stage. Both parties of politics feel the urgency to make up for legal progress in other countries.”

Candidate from the Democratic Party Lee Jae-Myung and People Power Party Nominated Kim Moon-Sooo have found rare common ground Support for crypto ETFs.

Nevertheless, the two candidates run strongly on Stablecoin’s policy.

Lee supports won-backed stablecoins to curb the capital flight, or money that leaves its coasts, referring to around $ 40.8 billion in Korean scholarships in Q1.

The country must “prevent national wealth from leaking abroad,” he said during policy discussions earlier this month.

As a leader, Lee plans to create a monitoring system and lower transaction costs, giving investors regulated access to crypto.

In the meantime, Kim is trying to dismantle the rule for one change-a-a-bancaire rule to facilitate bank restrictions for crypto companies. He Plans to reduce taxes For the growing middle class of the country, making a transparent cryptomarket possible and allowing crypto-linked funds to operate.

But in order to enter those crypto -etfs, regulators should work with the parties and their positions on digital assets.

Last week, the Financial Services Commission (FSC) of the country released details From a discussion on 1 May that would enable non-profit organizations and crypto exchanges to sell digital assets from June.

In the same week, the Democratic Party of South Korea launched A committee for digital assets to establish extensive regulations.

Decrypt Both parties believe for comments about their respective crypto policy positions.

Learn from the past

The consensus between the two large parties suggests that crypto and digital assets regulations in the country could quickly relax, not even with regard to repeating what happened to Do Kwon and the collapse of TerraAn algorithmic stabilecoin.

In addition to the impact on consumers, Terra’s collapse has led to the crypto industry in South Korea “Acquired as one of the darkest markets, in which some people call it gambling, “said SEO.

In combination with various other controversial scandals, including one with the commercial activities of a politician, the government of industry is a priority.

“Now that legislators are communicating with experts from the industry who have studied the first movers, such as the EU, Singapore, the US and the VAE, to create the most applicable regulatory framework for the Korean market, and this includes the consumer protection measures,” SEO added.

ETFs

Candidates also show interest in launching crypto ETFs in Korea, although the subject has been driven several times by politicians since the US launched Bitcoin ETFs and little concrete progress has been made with their introduction.

“[The] The first step should start by assessing which party spot ETF can operate, including custody, “Ryan Yoon, senior analyst at Tiger Research, a Web3 market analysis company with expertise in Asian markets, told Decrypt.

“Investor classification depends on their risk tolerance, but I think an ETF will open for everyone,” Yoon noted.

KP Jang, Chief Strategy Officer on the Seoul-based Data Intelligence Platform Xangle, said Decrypt This will probably happen, but with certain conditions.

“Won-backed stablecoins will probably mainly circulate in Korea,” said Jang.

They would “be relatively less susceptible to the activation of global market shocks such as the Terra-Luna incident,” Given how the Korean won (WFD) is not used “as a settlement currency” elsewhere.

The proposed won-backed stablecoin would also be published as a “fully collateral model”, Jang noted, adding that “actual Korean reserves” would be “would be held completely against the amount issued”. “

Such clarity in collateral would considerably improve stability and “reduce the risk of a collapse such as that of earlier crypto-algorithmic models,” he said.

Yoon from Tiger Research repeated this and said that a repetition of such failure is unlikely.

Nevertheless, Zuid -Korea is missing official discussions or regulations to protect Stablecoin users, “said Yoon, referring to the US Genius Act could serve as a “potential reference”.

Published by Sebastian Sinclair