Layer-1 blockchain Kaia has promised to launch a won-pegged stablecoin after President Lee Jae-myung's inauguration on Wednesday. Lee Jae-myung is a left-leaning politician whose campaign included a series of cryptocurrency-friendly commitments.
Launching a won-pegged stablecoin is one of the cryptocurrency goals proposed during Lee Jae-myung's campaign, distinguishing him from other cryptocurrency-friendly candidates.
However, the issuance of stablecoins faces legal obstacles, as the South Korean constitution grants the central bank—the Bank of Korea—exclusive rights to issue currency.
Nevertheless, the Democratic Party, to which Lee Jae-myung belongs, tends to support innovation in the private sector. The party's Digital Assets Committee chairman, lawmaker Min Byoung-dug, has expressed support for privately issued stablecoins and is preparing to propose the Digital Asset Basic Act, a comprehensive legislative framework for the cryptocurrency industry.
Given that Kaia is backed by South Korean tech giant Kakao, its interest in stablecoins is significant. Kakao is a provider of many key digital services in South Korea, including messaging, navigation, and finance.
Traditional and cryptocurrency investors in South Korea have reacted enthusiastically to the new government.
According to a survey by the Korea Chamber of Commerce and Industry (cited by several local media), nearly 60% of respondents indicated that they plan to expand their cryptocurrency holdings during Lee Jae-myung's term.
This optimism spilled over into the stock market on Monday, with payment companies Kakao Pay and its competitor Danal both closing up 29.9% that day.
Kakao Pay is widely regarded as a potential beneficiary of domestic stablecoins due to its digital wallet infrastructure and QR code payment system. The company is Kakao's fintech division, and Kakao's Web3 subsidiary developed the Klaytn blockchain, which has now merged with Finschia, supported by the Japanese messaging app LINE, to form Kaia.
The rise in stock prices also reflects a growing belief that stablecoin regulation will advance quickly. Former Deputy Minister of Finance Kim Yong-beom, who until recently was the head of research at blockchain venture capital firm Hashed, has now been appointed as President Lee Jae-myung's chief policy officer.
The upcoming Digital Asset Basic Act, proposed by lawmaker Min Byoung-dug, is expected to include provisions for the legalization and oversight of won-pegged stablecoins, indicating that legislative support is coalescing.
The main uncertainty facing President Lee Jae-myung's term is several criminal trials that began before his election. The most politically sensitive case—a retrial for alleged violations of election law during the 2022 campaign—was scheduled to resume on June 18.
The South Korean constitution grants the president criminal immunity unless it involves rebellion or treason, but it is unclear whether this applies to trials that were already underway before taking office.
On Monday, the Seoul High Court ruled that Article 84 of the constitution does indeed apply, indefinitely postponing the trial. This decision effectively clears political obstacles for the Lee Jae-myung administration to pursue its cryptocurrency agenda. The other four trials remain pending and may now be delayed or suspended based on interpretations by various courts.
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Original: “Kaia promises to launch won-pegged stablecoin, South Korean payment stocks soar”
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