All three major South Korean presidential candidates — Kim Moons (People’s Power Party), Ee Jae Myung (D-Party), and Lee Jun Chic (Reform Party) — have publicly expressed support for the approval of the Bitcoin Spot ETF and the recognition of inclusion by institutional investors in the country’s cryptocurrency market.
This is a considerable event now given South Korea bans the issuance and trading of Bitcoin ETFs and limits institutional participation in the cryptocurrency market. As a result, 100% of the domestic crypto trading volume is driven by retail investors.
This powerful retail presence creates a unique market phenomenon in the country known as the “Kimchi Premium”, with local Bitcoin prices often exceeding the global average by large margins.
A regulatory overhaul is looming after the June 3rd presidential election
However, a unified stance among presidential candidates could very well mean a major change in South Korea’s regulations, leading to many new initiatives. For example, allowing institutional investment could introduce significant capital into the market and increase liquidity.
Furthermore, introducing Bitcoin ETFs could help to align the Korean crypto market with global standards, perhaps even reducing the mentioned Kimchi premium events.
Whatever the future may be, the upcoming presidential election coming next month on June 3rd has brought cryptocurrency regulations to the forefront of the country’s political discourse.
Korea and the code
Asian countries have enacted many rules regarding cryptography over the past few years. For example, since 2021, Korea has implemented strict real-world account systems for crypto exchanges. Then, a year later, an exchange was necessary to share personal information about senders and recipients of transactions that exceeded $1,000.
There is also a ban on privacy coins where cryptocurrencies such as Monero (XMR) and Zcash (ZEC) are prohibited from being exchanged due to concerns about anonymity.
It is also worth noting that despite all regulations, the country has seen multiple developments in the crypto industry. The Bank of Korea (BOK) conducts tests on Central Bank Digital Currency (CBDC) with financial institutions and technology partners such as Samsung.
Additionally, SK Group (the multinational manufacturing and services conglomerate based in Seoul) and LG CNS (the technical division of LG Group, the fourth largest conglomerate in the country) are investing in blockchain logistics, supply chain and digital identity projects.
That said, there are some signs of potential change, and there should be something happening in the upcoming presidential elections for the South Korean crypto industry.
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