Presidential candidates are proposing various pledges, such as virtual asset spot Exchange Traded Funds (ETF) and regulatory frameworks for stablecoins, to win the votes of virtual asset investors. However, the virtual asset industry expresses disappointment due to the lack of concrete implementation methods.
According to the political circles on the 2nd, the policy pledge books of Lee Jae-myung of the Democratic Party of Korea and Kim Moon-soo of the People Power Party both include the introduction of virtual asset spot ETFs. Both candidates intend to create indices based on Bitcoin or Ethereum, allowing the general public to trade them in the stock market. Notably, both candidates treat the Bitcoin spot ETF as more important than other pledges, with Kim Moon-soo listing it as one of his top 10 pledges and Lee Jae-myung emphasizing its introduction via social media.
The Bitcoin spot ETF was first approved on the U.S. stock market in January of last year. Since then, it has been gradually introduced in countries like Hong Kong, where the virtual asset industry is rapidly growing. Previously, only futures ETFs were allowed, but with the U.S. Securities and Exchange Commission (SEC) permitting spot ETFs after a decade, both institutional and retail investors can now directly invest in Bitcoin through securities accounts.
However, in Korea, the introduction of spot ETFs is being delayed as the current Capital Markets Act does not recognize virtual assets as underlying assets for financial products. Once spot ETFs are introduced, investors will be able to invest indirectly in virtual asset products using existing securities accounts, without the need for separate virtual asset wallets or exchange memberships. Local securities firms and the virtual asset industry view the virtual asset spot ETF as a future revenue source.
Pledges related to stablecoins have also been announced. Candidate Lee Jae-myung promised to establish methods for issuing and distributing stablecoins based on won, while candidate Kim Moon-soo proposed introducing a regulatory framework for stablecoins, including issuer requirements, reserve asset standards and management conditions, transparent accounting and disclosure obligations, and user legal rights.
This essentially entails establishing a legal foundation for stablecoins. In relation to stablecoins, Reform Party candidate Lee Jun-seok also pledged the introduction of safety measures, which sparked attention as Lee Jae-myung and Lee Jun-seok's opinions on stablecoins diverged during an earlier presidential debate.
Another common pledge is the legislation of Security Token Offerings (STO). Both candidates, Lee Jae-myung and Kim Moon-soo, put forward the prompt legalization of STOs, but the Democratic Party of Korea offers a slightly more detailed approach. The Democratic Party proposes allowing systematic transactions of assets like government bonds, art, and patents, which were not traditionally traded as securities, enhancing liquidity through the institutionalization of over-the-counter trading platforms, and establishing fair valuation, auditing, and rights confirmation systems.
In contrast, the People Power Party did not mention specific implementation plans or system designs. Instead, the People Power Party focused more on comprehensive regulatory improvements across virtual assets. The party presented the introduction of virtual asset spot ETFs, the establishment of a stablecoin regulatory framework, and the enactment of virtual asset laws as pledges, emphasizing the expansion of the entire digital asset ecosystem and the establishment of an institutional foundation over STOs.
Additionally, various virtual asset-related pledges were announced, including the promotion of the enactment of the Basic Act on Digital Assets (Lee Jae-myung), the abolition of the 'one exchange-one bank' principle (Kim Moon-soo), and the introduction of a data special zone system to attract global digital assets (Lee Jun-seok). A virtual asset industry insider expressed expectation, noting, 'This is the first time so many pledges related to virtual assets have poured in.'
However, there are concerns that these pledges related to virtual assets may end up being one-off attention-grabbers for the election. There is also criticism over the lack of specificity in the pledges. For example, the introduction of a Bitcoin spot ETF would require an amendment to the Capital Markets Act along with hedging options. Typically, securities firms take short positions with futures to hedge the price fluctuation risk of ETFs. If only the spot ETFs are listed domestically as they are, only the trading of derivative products listed in the U.S. may increase.
If an ETF tracking virtual assets is to be introduced, an index that accurately reflects virtual asset prices will need to be developed. If significant price differences (Kimchi Premium) arise in domestic and international exchanges, the stability of these financial products could be greatly undermined. Kim Gap-rae, a senior researcher at the Capital Market Research Institute, stated, 'As the current presidential candidates are highly interested in virtual assets, further research should follow,' adding, 'Various studies are needed, including amending the Capital Markets Act to establish trust in virtual asset prices and addressing the root of virtual asset custody issues.'