Lee Jae-myung, the front-runner in South Korea's presidential election, has proposed introducing a won-backed stablecoin aimed at curbing capital flight and enhancing financial sovereignty. During a policy discussion, he emphasized that such a stablecoin would help retain domestic wealth and reduce dependence on foreign digital assets, particularly US dollar-based ones. Current South Korean laws prohibit domestic stablecoin issuance, resulting in significant asset outflows to foreign exchanges. Between January and March, approximately 56.8 trillion won ($40.8 billion) in outflows were recorded, with a substantial share attributed to foreign stablecoins. Lee's proposals also include allowing institutional investors, like the National Pension Fund, to invest in cryptocurrencies, provided price stability criteria are met. However, economists have raised concerns about potential inflation of the money supply due to stablecoins. In line with these discussions, the Democratic Party has established a 'Digital Asset Committee' to develop cryptocurrency policies and address regulatory issues.

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