Layer-1 blockchain platform Kaia has announced plans to introduce a stablecoin tied to the South Korean won, following the swearing-in of President Lee Jae-myung on Wednesday. Lee, a progressive leader, stood out during the election campaign with strong pro-crypto policies.
Issuing a stablecoin backed by the won was one of the central pillars of Lee’s digital asset strategy. While the proposal aligns with his broader crypto-friendly agenda, it faces regulatory challenges—South Korea’s Constitution reserves the right to issue currency solely for the central bank, the Bank of Korea.
Despite the legal complexities, Lee’s Democratic Party has shown a clear openness to private sector involvement in the digital asset space. Min Byoung-dug, a key lawmaker leading the party’s Digital Asset Committee, has expressed support for privately issued stablecoins and is preparing to introduce the Digital Asset Basic Act—a wide-reaching legislative framework for crypto regulation.
Kaia’s move holds significance due to its ties with tech giant Kakao, which operates key services in South Korea including messaging, maps, and digital finance.
Investors Fuel Rally in Payment Sector
The new government’s crypto-friendly stance has sparked optimism among both retail and institutional investors. A survey from the Korea Chamber of Commerce and Industry, reported by several domestic media outlets, found that nearly 60% of respondents intend to increase their crypto investments during Lee’s presidency.
This enthusiasm was evident in Monday’s stock market performance, where shares of Kakao Pay and its competitor Danal each surged 29.9%.
Kakao Pay, known for its QR-based payment system and integrated wallet, is considered well-positioned to benefit from a locally issued stablecoin. As Kakao’s fintech branch, it also has close ties to the Web3 ecosystem through Kaia, which emerged from a merger between Klaytn (initially developed by Kakao) and LINE-backed Finschia.
The market rally also reflects growing confidence in upcoming regulatory clarity. Kim Yong-beom, a former vice finance minister and ex-head of research at crypto VC firm Hashed, has been appointed as the president’s chief policy officer, further signaling support for the sector.
Min’s anticipated Digital Asset Basic Act is expected to include legal provisions for stablecoins pegged to the won, suggesting legislative momentum is building in favor of the initiative.
Political Roadblocks Cleared for Lee’s Crypto Ambitions
President Lee’s term began under the shadow of several ongoing criminal cases, with the most notable being a trial related to alleged election law violations during his 2022 campaign. That case was set to resume on June 18.
However, a Seoul High Court ruling on Monday invoked Article 84 of the Constitution—which grants sitting presidents immunity from criminal prosecution except in cases of treason or rebellion—delaying the trial indefinitely.
This ruling gives Lee’s administration the green light to push forward with its digital asset policies. While four other legal proceedings remain, any further action will depend on each court’s interpretation of presidential immunity going forward.
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