The appointment of Kim Yong-beom as a policy advisor, a pro-digital asset figure, signals increasing government support for the development of digital currencies.

In the first half of 2025, South Korea's Kospi index surged nearly 30%, reaching a four-year high, largely fueled by a strong pro-crypto stance from President Lee Jae-myung.

This remarkable increase is primarily attributed to speculation surrounding won-pegged stablecoins, which has sparked significant investment interest in blockchain and fintech stocks.

The introduction of the Digital Asset Basic Act aims to provide regulatory clarity for digital assets, allowing companies with a minimum of 500 million won in capital to issue stablecoins.

Retail investors have significantly ramped up their leverage, with margin loans climbing to approximately 20.5 trillion won ($15 billion), reflecting a strong appetite for profits in the volatile market.

Fintech companies like Aton have reported substantial gains, with stock prices rising around 80% due to anticipated benefits from state-approved stablecoins.

Companies involved in the Bank of Korea's digital currency initiative, such as Kakao Pay and LG CNS, have seen their stock prices soar, with Kakao Pay doubling in value and LG CNS increasing nearly 70%.

However, concerns persist, as Bank of Korea Governor Rhee Chang-yong has raised alarms about non-bank entities issuing stablecoins, suggesting that banks should lead this under strict regulations.

A proposed legislative bill would allow companies with only 500 million won in equity to issue stablecoins, raising concerns about potential systemic risks from undercapitalized entities.

The growing adoption of digital assets is evident, with over 25% of South Korean adults owning cryptocurrencies, and 70% of those aged 20 to 50 planning to invest further.

Despite the optimism surrounding the market, analysts caution that some stocks driven by the digital currency craze may be overvalued, advising investors to remain vigilant due to share volatility.

As the debate continues over whether stablecoin issuance should be limited to banks or opened to tech companies, lawmakers are expected to present a related bill in July 2025.