South Korea’s stock market has seen remarkable gains following President Lee Jae-myung’s endorsement of crypto-won-pegged stablecoins. Investors rushed into related stocks after Lee revealed his commitment to allowing digital currencies tied to the Korean won. The Kospi index has climbed nearly 30 percent so far this year, hitting levels last seen four years ago.
Companies previously involved in the Bank of Korea’s digital currency pilot have become market favorites this month. Kakao Pay stock surged over 100 percent in June, while LG CNS shares soared nearly 70 percent during the same period. Investors began booking profits this week, yet both stocks remain significantly higher than early-year levels.
Fintech firm Aton’s share price surged by a massive 80 percent on South Korea’s junior Kosdaq index. Mobile gaming company ME2ON’s value tripled after its issuance of a stablecoin aimed at online casino platforms. This dramatic rise is against increasing expectations for stablecoin regulation for innovation from the new administration.
Crypto Stablecoin regulation fuels investor hype
Margin chasers for individual investors have not shied from seeking gains and pushed spectacular margin loans to ₩20.5 trillion, or about $15 billion. With silence from the government on final details about regulation, purchasing pressure from fervour has dominated.
Much of the excitement traces back to Lee’s appointment of Kim Yong-beom, a digital asset supporter, as his chief policy adviser. A new bill proposes allowing companies with ₩500 million in equity to issue stablecoins, which critics fear could introduce financial risks.
Still, South Korea’s cryptocurrency market remains one of the most active around the world. Trading volumes for dollar-pegged stablecoins in the country spiked to ₩57 trillion just during the first quarter of 2025.
Financial institutions have also expressed firm interest in joining once regulations are in place. Bank of Korea Governor Rhee Chang-yong has, however, flagged stablecoins from non-bank sources.
While discussions continue, there are worries about eventual overvaluation and a word of caution expressed about a market driven by quickly fluctuating sentiment.
