South Korea’s new President, Lee Jae-myung, is wasting no time in delivering on his crypto promise to allow local companies to issue stablecoins. Lee has been a vocal proponent of cryptocurrency stablecoins. His recent victory may usher in further growth for South Korea’s budding crypto sector.

South Korea: The Next Crypto Hub In Asia?

The winning Democratic Party proposed the Digital Asset Basic Act on Tuesday. This act aims to improve transparency while promoting competition in the crypto sector. The new act allows South Korean companies to issue stablecoins, given they have at least 500 million won ($367,876) worth of equity. Companies have to guarantee that refund reserves are available. The ruling party also clarified that the assets must first be approved by the Financial Services Commission.

The global stablecoin sector faced a major disaster in 2022 after the collapse of the TerraUSD stablecoin. Terra, the firm behind the project, was based in South Korea.

The latest legislation is another significant milestone for South Korea’s cryptocurrency journey. The nation is home to 18 million crypto users. The figure represents nearly one-third of the country’s total population.

Stablecoins Continue To See Widespread Adoption

Stablecoins have experienced quite a surge in popularity over the last few years. The fiat-linked asset class has become a foundational part of the cryptocurrency market.

A clear sign of South Koreans’ love for stablecoins is the expanding interest among the population. During the first three months of this year, about 57 trillion won of transactions took place in the stablecoin market. Most trading happened with USDT, USDC, and USDS on five major exchanges.

Also Read: US Banks Team Up on Secret Crypto Stablecoin Project

Even as stablecoins are gaining popularity, South Korea’s central bank is not keen on the new direction. In Rhee Chang-yong’s view, the effectiveness of monetary policy could be interrupted by stablecoins issued by non-bank organizations. Rhee believes that giving this job to the central bank can boost the stability of the market.