The South Korean presidential election may influence the global Crypto Assets landscape

South Korea is set to hold a presidential election soon, and the outcome of this election will not only affect South Korea but may also have a profound impact on the global Crypto Assets market. As the third largest Crypto Assets market in the world, after the United States and China, South Korea plays a key role in the Web3 space.

The Important Position of the Korean Crypto Assets Market

The South Korean crypto market is enormous, with a daily trading volume reaching 5.4 billion USD and nearly 10 million active users. Many international projects see South Korea as an important springboard for entering the Asian market. South Korean investors maintain a strong interest in emerging tokens, with active on-chain activities, making it an important indicator of the global acceptance of new projects.

Four Major Changes That May Occur After the Election

1. Crypto Assets tax policy adjustment

Currently, the taxation on virtual assets in South Korea has been postponed to be implemented in 2027. However, the new government may implement the taxation policy earlier. If the taxation policy is implemented, based on international experience, the trading volume on local exchanges in South Korea may see a decline of over 20%.

2. The likelihood of Crypto Assets ETF approval has increased.

Most candidates generally support the introduction of Bitcoin spot ETFs, which significantly increases the likelihood of early approval for the ETFs. The launch of the ETFs will promote market competition, lower investment thresholds, and may lead to the emergence of more innovative financial products.

3. "One Exchange One Bank" model may be adjusted

The current "one exchange, one bank" model limits market competition and user choice. The new government may consider relaxing this restriction, allowing exchanges to collaborate with multiple banks. This would help enhance market competition and provide more convenience for users.

4. Regulatory Framework for Korean Won Stablecoins

Although South Korea has previously focused more on the development of central bank digital currency ( CBDC ), the demand for the Korean won stablecoin is growing. Candidates have begun discussing the possibility of a Korean won stablecoin, but a specific regulatory framework still needs time to be perfected.

Transformation is slow but inevitable

Despite the significant implications of these policy changes, comprehensive implementation will be difficult in the short term. Web3-related topics are currently not the core focus of the elections. However, in the long run, regulatory changes in areas such as taxation of Crypto Assets, issuance of security tokens (STO), etc., will gradually advance. Market participants should prepare for a more regulated policy environment.