How Will the South Korean Election Affect the Global Crypto Assets Market?

South Korea will hold its presidential election on June 3rd. As the world's third-largest Crypto Assets market, the results of this election will have a profound impact on the global encryption industry.

South Korea's Position in the Global Crypto Assets Market

South Korea has become the world's third largest Crypto Assets market after the United States and China, with a daily trading volume of 5.4 billion USD and 9.7 million active users. For many international projects, South Korea is a key benchmark and strategic entry point into the Asian market.

The strong interest of South Korean users in altcoins and their active on-chain activities make it an important indicator for measuring the global acceptance of new projects. Therefore, the topics related to cryptocurrency taxation, stablecoin regulation, and ETF approval in this election will have a significant impact on global investors and project operators.

Four Major Changes in the Crypto Assets Market After the Election

1. Crypto Assets tax policy adjustment

Currently, the taxation of virtual assets in South Korea has been postponed until 2027, but the new government is likely to implement it earlier. Based on international experience, the trading volume on domestic exchanges may decrease by more than 20% after taxation, with funds potentially shifting to offshore platforms.

2. Crypto Assets ETF approved

All major candidates support the introduction of a Bitcoin spot ETF, which is the policy most likely to be quickly implemented after the election. The launch of the ETF will compete with existing exchanges on fees, lower the investment threshold, and may spur new financial innovations.

3. "One Exchange One Bank" Model Reexamination

The current model limits consumer choices and poses systemic risks. Allowing multiple banks to cooperate can strengthen competition, bringing users lower fees and innovative services. However, regulators are cautious, and this reform may need to be promoted over the long term.

4. Regulatory Framework for Korean Won Stablecoin

Although all candidates have expressed support for the Korean won stablecoin, there is currently a lack of detailed and feasible policy framework. Considering regional trends, South Korea may face pressure to develop a local currency stablecoin to maintain its competitiveness as a financial center. However, this requires the establishment of a comprehensive legal and regulatory system, and it is expected to be promoted in a phased manner.

Conclusion

Although these policy changes are significant, it is difficult to fully implement them in the short term. Regulatory changes are expected to progress gradually, but the trend of transformation is inevitable. Topics such as the taxation of Crypto Assets and legislation on the issuance of security tokens will continue to advance. Market participants should prepare for an increasingly regulated and compliant policy environment.