South Korea’s Democratic Party Bets on Crypto With New Committee to Attract Digital-Native Voters

South Korea’s Democratic Party—the country’s largest political faction—has formally launched a Digital Asset Committee to shape national cryptocurrency policy and support the growth of the digital asset industry.

The committee’s mandate includes addressing challenges related to central bank digital currencies (CBDCs), cryptocurrencies, and virtual assets, with an emphasis on aligning outdated regulatory frameworks with the party’s ambitions in the sector.

The committee convened its first meeting on 13 May at the National Assembly Members’ Hall in Seoul, where it prioritised tackling regulatory uncertainty and pressing issues such as stablecoin oversight, especially in light of the US government’s push for dollar-backed stablecoins.

This new body adds to a growing list of digital asset-focused initiatives in South Korea, including the Virtual Asset Committee launched in late 2024 and a public-private task force created in 2022 by the Financial Services Commission (FSC).

Leadership of the committee includes key political figures such as National Assembly Chairman Min Byeong-deok, who serves as chair, along with Standing General Election Committee Chairman Yoon Yeo-joon, Muksanism Committee Chairman Maeng Seong-gyu, National Assembly member Kim Byeong-gi, and former Assembly Chairman Kim Jeong-woo.

Executives from major local exchanges—Upbit, Bithumb, Coinbit, and Gopax—are also expected to participate, signalling a collaborative effort between lawmakers and industry leaders.

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During the committee’s inaugural meeting, Chairman Min Byeong-deok voiced concern over South Korea’s “one-exchange-one-bank” regulation, which currently restricts cryptocurrency exchanges to partnering with a single financial institution.

He noted that the committee is actively engaging with regulators to address this constraint, signalling a push for more flexible banking relationships within the digital asset sector:

“There are clear shortcomings to the one exchange, one bank principle.”

Min also confirmed that the committee is in talks about the appropriate regulatory framework for stablecoins, including whether they should fall under a licensing regime or a reporting-based system.

He noted:

“There is also a point of contention as to whether the Bank of Korea or the FSC should handle the regulation.”

The news came shortly after a Bank of Korea executive expressed concerns over the issuance of the South Korean won-backed stablecoins.

Bank of Korea’s Koh Kyung-chul reportedly said at a conference on 12 May:

“Stablecoin has a great impact on the implementation of central bank policies such as monetary policy, financial stability, and payment settlement. The negative impact on the central bank’s policy implementation should be minimized by the central bank’s practical intervention in the approval stage.”

The discussion follows recent comments from a Bank of Korea executive who raised alarms about the risks tied to issuing won-backed stablecoins.

This wave of policy engagement by the Democratic Party comes just weeks ahead of South Korea’s presidential election, now set for 3 June 2025—nearly two years earlier than originally scheduled.

The early election follows the impeachment of former President Yoon Suk Yeol, intensifying political momentum around issues like digital asset regulation.