South Korea's ruling Democratic Party, led by President Lee Jae-myung, is advancing legislation to permit the issuance of domestic stablecoins through the proposed Digital Asset Basic Act. This legislation aims to enhance transparency in the crypto market and promote competition, allowing local firms to issue stablecoins with a minimum capital of 500 million won and requiring that these companies secure regulatory approval from the Financial Services Commission. The push for a stablecoin comes amid a surge in crypto trading, with over $42 billion transacted in US dollar stablecoins in the first quarter of 2025. While Lee aims to fulfill his campaign promises, including launching a stablecoin and permitting pension fund investments in crypto, he faces opposition from the Bank of Korea, which cautions that such non-bank stablecoins may undermine monetary policy. Despite the recent rally in crypto-related stocks, analysts question the sustainability of the market's reaction to these developments.

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