- Kospi index soars 30%, driven by won-pegged stablecoin speculation boom.
- ME2ON shares jump 230% amid stablecoin optimism surge.
- Kakao Pay rallies strongly, despite warnings of speculation and possible overvaluation risks.
South Korea’s stock market has seen an unexpected surge as investors bet on the growth of won-pegged stablecoins. Since President Lee Jae-myung took office, the Kospi index has risen nearly 30% year-to-date, reaching a four-year high. This renders South Korea the most excellent market in the first half of 2025 in Asia.
ME2ON Shares Surge 290% Amid Won Stablecoin Frenzy
According to an analysis by Korea Economic Daily, thirteen of the thirty biggest gainers on the Kospi and Kosdaq since June 2 are tied to companies linked with stablecoin concepts. This shows that investors still feel very confident. There is no official government support yet. Also, there is no clear legal framework for stablecoin issuers. However, investors continue to bet on this market.
ME2ON Co., a gaming company has registered the steepest increase, gaining close to 290% in 3 weeks. Such firms are perceived by investors as potential in the case of growth in the stablecoin ecosystem with the adoption of new policies.
The digital payments company Kakao Pay, which is a subsidiary of Kakao Corp., has also returned strongly. Since early June, its share price has gained more than 140% to surpass its initial public offering price to the first time in years. Kakao Pay is also considered by many as one of the main players of win-pegged stablecoin payments in the future.
On June 20, Kakao Pay was listed as an investment Warning stock by the Korea Exchange. However, its share price increased by 46% more in the next three trading days leading it to be suspended from trading. This explosion is a wave of speculation.
Governor Rhee Urges Banks to Lead Won Stablecoin Issuance
A top official in the fintech industry cautioned that the run-up is more of an expectation or anticipation as opposed to a demonstrated ability to issue stablecoins. Other companies do not either have the technology or infrastructure to deliver the goods but retail investors keep buying shares ferociously.
At the heart of this excitement is a proposal by the ruling Democratic Party. The proposed Digital Asset Innovation Act would enable companies that have only 10 billion won of capital to issue stablecoins. Opponents point to it as subjecting the financial system to ill-equitized firms and developing new liabilities.
The Electronic Financial Transactions Act sets strict capital requirements. Companies need at least 50 billion won to run electronic financial services. They must have 20 billion won to operate as prepaid payment providers. The proposed capital level against the issuers of stable coin is low about these benchmarks.
BOK Governor Rhee Chang-yong has expressed his concern regarding low-stablecoins issued by non-banking entities. He lately cautioned that they are at risk of undermining the central bank’s monetary policy management capacity. Remarkably, he feels that banks must be given the lead to issue stablecoin with tight regulations.
A world argument is arising on whether to make the use of stablecoins limited to the banking department or open it to technical companies and startups. South Korean lawmakers have plans to present the bill in July, which predetermines the further discussion of the role of digital assets in the economy of country.
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