Crypto Fuels South Korea’s Early Presidential Election Race
South Korea’s Presidential Election is being heavily influenced by cryptocurrency, with candidates vying for support from a diverse range of digital asset investors. The June 3rd election, triggered by a political crisis, has placed digital assets at the forefront of the campaign, reflecting a significant shift in the electorate’s approach. All three leading candidates have implemented crypto-friendly policy proposals, including the legalization of spot Bitcoin exchange-traded funds (ETFs) and easing banking rules currently restricting Fiat-to-crypto trading to just five approved platforms.
The election arose from the impeachment of former president Yoon Suk-yeol, following his controversial declaration of martial law in late 2024, swiftly overturned by lawmakers. This political upheaval dramatically highlighted the growing importance of cryptocurrency within the Korean economy and broader political discourse. Yoon’s 2022 campaign, largely focused on reforming crypto regulations, aimed primarily at younger voters, but the issue’s prominence has amplified significantly this time, as older generations increasingly engage with digital assets.
Three leading presidential candidates have championed pro-crypto policies. Notably, Lee Jae-myung of the Democratic Party, who lost to Yoon in the 2022 election, is returning with a second crypto-friendly campaign. Kim Moon-soo is running under the current ruling party, the People Power Party (PPP), while former president Yoon has distanced himself from the PPP, allowing Kim to shape the conservative base’s direction. Lee Jun-seok, previously the youngest-ever leader of the PPP, now leads his newly formed Reform Party, splitting from the ruling bloc in January 2024.
“The political sphere has actively embraced cryptocurrencies as a key campaign agenda,” Park Sung-jun, head of the Blockchain Research Center at Dongguk University, stated to 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 currently require crypto exchanges to partner with licensed banks to offer fiat services – a system that has fostered a near-monopoly among just five approved platforms. Lee has also proposed launching a stablecoin pegged to the won to reduce reliance on tokens issued abroad. Lee Jun-seok pushed back, noting that South Korea had once had a won-pegged algorithmic stablecoin, TerraKRW (KRT), part of the Terra ecosystem that suffered a multibillion-dollar collapse.
The candidates clashed again on stablecoins during a live debate, where Lee Jae-myung argued for the safety of centralized and fiat-backed stablecoins. Presidential candidates quizzed each other on the difference between USDT and USDC.
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, many of which were never implemented, such as lifting bans on play-to-earn (P2E) gaming and initial coin offerings. 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. Nexon shares have soared since the company launched its own crypto.
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 hold larger holdings. By year-end, 221,000 investors held at least 100 million won (about $73,000) in crypto, with 172,500 – or 78% – of those investors over 40.
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. Presidential hopefuls have ignited institutional interest in South Korea’s retail-driven crypto market.
“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. “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.
The 21st presidential election is scheduled to take place on June 3.
