South Korean President Supports Won-Based Tokens, Sparking Rally in Stocks
June 29, 2025 — South Korean equities have surged significantly following President Lee Jae-myung’s recent endorsement of cryptocurrency assets backed by the South Korean won. This supportive stance toward won-based digital tokens has ignited heightened enthusiasm among retail investors, especially in companies connected to digital currency initiatives.
Market Performance and Investor Interest
The benchmark Kospi Composite index, South Korea’s primary stock market gauge, has risen nearly 30% year-to-date, making it the best-performing market in Asia for the first half of 2025. This impressive growth is partly fueled by excitement around companies tied to crypto projects and the potential for further government facilitation of digital currency assets.
According to reports from the Financial Times, stocks linked to the Bank of Korea’s digital currency programs have experienced notable price swings. For instance, LG CNS shares soared about 70% in June before a partial retracement as some investors took profits. Meanwhile, shares of Kakao Pay more than doubled, reflecting strong retail demand.
On the Kosdaq market, firms with stablecoin connections also posted remarkable gains. Fintech security company Aton’s shares jumped 80%, while ME2ON, a mobile game developer, tripled after its subsidiary launched a dollar-pegged stablecoin designed for casino applications.
Rising Margin Loans and Policy Signals
The retail enthusiasm is evident in the rise of margin loans, which reached an outstanding ₩20.5 trillion (approximately $15 billion), according to the Korea Financial Investment Association. Investors are leveraging themselves to capitalize on the potential upside in crypto-related equities, even as detailed cryptocurrency regulations remain pending from the government.
President Lee’s appointment of Kim Yong-beom, a known proponent of digital tokens, as chief policy adviser has intensified expectations of clearer crypto guidelines. Concurrently, a parliamentary bill introduced this month proposes allowing companies with at least ₩500 million ($365,000) in equity capital to issue won-pegged stablecoins, signaling government openness to regulatory adaptations.
South Korea’s Active Crypto Market and Stablecoin Development
South Korea is one of the world’s most vibrant cryptocurrency markets, with about 20% of the population actively trading digital assets. Trading volumes for USD-pegged stablecoins hit ₩57 trillion in the first quarter alone, encouraging the Bank of Korea to accelerate its central bank digital currency (CBDC) preparations.
Banks, brokerages, and fintech firms have expressed strong interests in stablecoin issuance. Despite this enthusiasm, the government has not yet defined licensing requirements or set timelines for these digital assets. A fintech industry executive noted, “We are keen to do the business, but we are watching out for where the government draws the line in terms of regulation.”
Regulatory Concerns and Future Outlook
While the government and financial institutions explore the potential of won-backed tokens, Bank of Korea Governor Rhee Chang-yong has voiced concerns about the issuance of won-pegged stablecoins by non-bank entities. He highlighted risks related to capital flow disruptions and potential challenges to the effectiveness of monetary policy.
The unfolding developments point to a balancing act for South Korean regulators between fostering innovation in digital currencies and maintaining financial stability. Meanwhile, investors continue to drive demand for cryptocurrency-linked stocks, underpinned by optimism about new policy measures.
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