On June 9, 2025, South Korea's tech giant Kakao and its affiliated companies experienced a remarkable surge in stock prices, igniting investor enthusiasm and spotlighting the potential impact of the new Lee Jae-myung administration's digital innovation policies. Trading throughout the day reflected a robust market response, with Kakao's shares climbing as much as 16.03% to close above 51,000 KRW, a level not seen since May 2024. This rally was mirrored by significant gains in Kakao Pay, Kakao Bank, and Kakao Games, all buoyed by government-driven optimism surrounding artificial intelligence (AI) development and the anticipated introduction of a Won-pegged stablecoin.
Kakao Pay led the charge with an explosive 29.92% increase, hitting its daily upper trading limit at 49,500 KRW. This meteoric rise was fueled by growing investor confidence in the government's plans to accelerate the adoption of a Won-based stablecoin, which is expected to revolutionize the payment landscape. The stablecoin, operating on blockchain technology, promises to drastically reduce transaction fees compared to traditional credit cards and bank transfers, while enabling faster fund turnover for businesses. Such innovation is poised to benefit major platforms like Kakao Pay, Naver, and Toss, positioning them at the forefront of a digital payment transformation.
Backing this optimism is the new presidential policy office under Lee Jae-myung, which has established an AI Future Planning Office to spearhead the nation's leap toward becoming a global AI powerhouse. The president's commitment to fostering the AI industry as a top priority has invigorated IT companies, particularly those like Kakao that are pivoting towards AI-centric services. Kakao's collaboration with OpenAI, the creators of ChatGPT, is a key highlight in this strategy. The company plans to launch a Korean-style super AI agent platform in the latter half of 2025, integrating OpenAI's advanced AI models with Kakao's extensive ecosystem, which spans messaging, commerce, fintech, content, mobility, and healthcare.
Lee Seon-hwa, a researcher at KB Securities, expressed high expectations for this initiative, noting, "Kakao's life-friendly services combined with OpenAI's high-end AI model will lead to the creation of a Korean-style super AI agent platform with excellent inference capabilities and autonomy." This platform aims to offer superior AI-driven user experiences across a broad spectrum of daily services, potentially reshaping how consumers interact with technology in South Korea.
Despite the excitement, some caution remains within the investment community. While Kakao unveiled its AI service 'Kanana' previously, experts acknowledge that its technology still lags behind global tech giants. One securities analyst remarked, "Investors have not given high marks to Kanana's completeness. The company needs to launch competitive AI services and present a clear vision for monetization to boost its corporate value further." The details of the government's forthcoming AI policies will also be critical in determining the trajectory of Kakao's growth and the broader AI sector.
The surge in Kakao's stock price is also part of a broader 'honeymoon rally' observed across the South Korean stock market since the Lee administration took office. On June 9, the KOSPI index rose by 1.05% to close at 2,841.56 points, while the KOSDAQ index gained 0.40%, ending at 759.27 points. Foreign investors played a notable role in this upswing, with increased net buying contributing to the rise of major tech stocks like Samsung Electronics and SK Hynix.
Kakao Bank, another key player in the Kakao group, saw its shares surge by over 20% on June 9, reaching a 52-week high during intraday trading. Earlier in the week, the bank had already begun its ascent, closing with a 2.32% gain on June 5. The stock's momentum continued, with foreign and institutional investors showing strong net buying interest, while individual investors tended to sell shares. The bank's impressive performance reflects investor confidence in the company's prospects amid the government's digital finance initiatives.
Adding to Kakao Pay's appeal is the recent news of its planned acquisition of Shinsegae Group's simple payment services, SSG Pay and Smile Pay. This strategic move is expected to bolster Kakao Pay's position in the competitive fintech market, further fueling investor enthusiasm.
However, the introduction of a Won-pegged stablecoin is not without controversy. The Bank of Korea has expressed reservations, citing concerns that such coins could undermine the effectiveness of monetary policy and potentially serve as vehicles for capital regulation evasion. Bank Governor Lee Chang-yong warned, "Won-based stablecoins could be used to evade capital controls if they are exchangeable with dollar-pegged stablecoins." The central bank advocates limiting stablecoin issuance to traditional banks, a stance that may temper the pace and scope of stablecoin adoption.
Despite these challenges, the government's digital innovation agenda, particularly its focus on AI and fintech, has injected fresh dynamism into South Korea's tech sector. Kakao's transformation from a sprawling conglomerate to a more AI-focused enterprise aligns well with this vision, making it a bellwether for the country's technological future. Investors and market watchers will be keenly observing how these policies unfold and the tangible impacts on Kakao's AI capabilities and stablecoin initiatives.
In sum, the remarkable stock market rally on June 9 underscores the potent combination of government policy, technological ambition, and market sentiment driving South Korea's digital economy forward. Kakao and its affiliates stand at the nexus of these forces, embodying both the promise and the uncertainties of a rapidly evolving tech landscape.
