Layer-1 blockchain Kaia has announced plans to launch a stablecoin pegged to the South Korean won, following the inauguration of President Lee Jae-myung on Wednesday. Lee, a left-leaning politician, stood out during the campaign with a number of crypto-forward pledges, including support for a won-based stablecoin.
The move aligns with Lee’s broader crypto agenda but could face regulatory challenges, as South Korea’s constitution reserves the exclusive right to issue currency for the Bank of Korea.
Still, President Lee’s Democratic Party has shown a strong inclination toward private-sector innovation. Min Byoung-dug, a lawmaker leading the party’s Digital Asset Committee, has expressed support for privately issued stablecoins and is working on introducing the Digital Asset Basic Act—a comprehensive legislative framework aimed at regulating the crypto industry.
Stocks of Potential Stablecoin Beneficiaries Surge
Both traditional and crypto investors in South Korea have reacted positively to the new administration.
A survey by the Korea Chamber of Commerce and Industry, reported by several local media outlets, found that nearly 60% of respondents plan to increase their crypto investments during President Lee’s term.
That optimism carried over to the stock market on Monday, with payment firms Kakao Pay and its competitor Danal both ending the day with a 29.9% gain.
Kakao Pay, with its robust digital wallet infrastructure and QR code payment system, is widely viewed as a prime beneficiary of a potential domestic stablecoin. As the fintech arm of Kakao, it is closely tied to the Web3 space through Kakao’s blockchain subsidiary, which developed the Klaytn blockchain. Klaytn recently merged with Finschia, backed by Japanese messaging giant LINE, to form the newly rebranded Kaia.
The market rally also reflects growing confidence that stablecoin regulation will move forward swiftly. President Lee has appointed Kim Yong-beom—former vice finance minister and until recently head of research at blockchain venture firm Hashed—as his chief policy officer.
Meanwhile, lawmaker Min Byoung-dug is preparing to introduce the Digital Asset Basic Act, which is expected to include provisions to legalize and regulate won-pegged stablecoins—signaling that legislative momentum is building behind the initiative.
Lee’s Presidency Sets the Stage for Stablecoin Takeoff
A major source of uncertainty surrounding President Lee’s administration has been his involvement in multiple ongoing criminal trials, which began prior to his election. The most politically sensitive among them—a remand trial over alleged election law violations from his 2022 campaign—was initially set to resume on June 18.
While South Korea’s Constitution grants sitting presidents immunity from criminal prosecution, except in cases of insurrection or treason, it was unclear whether that protection would extend to trials already underway before inauguration.
That ambiguity was resolved on Monday when the Seoul High Court ruled that Article 84 of the Constitution does apply, effectively postponing the trial indefinitely. The decision clears a significant political obstacle, giving Lee’s administration a clearer path to advance its crypto-friendly agenda. Four other trials remain pending, but their progress will likely hinge on how individual courts interpret the constitutional immunity.
