Layer-1 blockchain Kaia has pledged to launch a South Korean won-based stablecoin following the Wednesday inauguration of President Lee Jae-myung, a left-leaning politician whose campaign included a series of crypto-friendly promises.
Launching a won-based stablecoin is one of the crypto goals laid out during Lee’s campaign that set him apart from other crypto-friendly candidates.
The issuance of stablecoins faces legal hurdles, as South Korea’s constitution grants exclusive authority over currency issuance to the central bank, the Bank of Korea.
Still, Lee’s Democratic Party is leaning toward private-sector innovation. Lawmaker Min Byoung-dug, who leads the party’s Digital Asset Committee, has signaled support for private-issued stablecoins and is preparing to propose the Digital Asset Basic Act, a comprehensive legislative framework for the crypto industry.
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Kaia’s interest in stablecoins carries weight, given its backing by Kakao, the tech conglomerate behind many of South Korea’s essential digital services, including messaging, navigation and finance.
Stablecoin beneficiaries’ stocks pump
Both traditional and crypto investors in South Korea have responded enthusiastically to the new administration.
According to a survey by the Korea Chamber of Commerce and Industry cited by multiple local outlets, almost 60% of respondents said they plan to expand their crypto holdings under Lee’s tenure.
That optimism spilled into the stock market on Monday, as payment firms Kakao Pay and rival Danal both closed the day up 29.9%.
Due to its digital wallet infrastructure and QR code payment system, Kakao Pay is widely seen as a potential beneficiary of a domestic stablecoin. The firm is the fintech arm of Kakao, whose Web3 subsidiary developed the Klaytn blockchain, now merged with Japanese messenger LINE-backed Finschia to form Kaia.
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The rally also reflects increasing confidence that stablecoin regulation will advance quickly. Kim Yong-beom, a former vice finance minister and until recently head of research at blockchain venture capitalist Hashed, has been appointed as President Lee’s chief policy officer.
Lawmaker Min’s forthcoming Digital Asset Basic Act is expected to contain provisions for legalizing and overseeing won-pegged stablecoins, signaling that legislative support is coalescing behind the plan.
Lee’s presidency and stablecoins cleared for takeoff
The main cloud of uncertainty hanging over Lee’s presidency has been his multiple ongoing criminal trials, which began before his election. The most politically sensitive case — a remand trial for alleged election law violations during his 2022 campaign — was initially scheduled to resume on June 18.
South Korea’s Constitution grants presidents immunity from criminal prosecution except in cases of insurrection or treason, but it was unclear whether this would apply to trials already in progress before inauguration.
On Monday, the Seoul High Court ruled that Article 84 of the Constitution does apply, indefinitely postponing the trial. The decision effectively clears the political runway for Lee’s administration to pursue its crypto agenda. Four other trials remain pending, with delays or suspensions now likely to depend on each court’s interpretation.
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