South Korean authorities claim that approximately half of the nation's cryptocurrency outflows in Q1 were comprised of stablecoins.
Crypto Outflows Soar in South Korea: Here's the Lowdown
South Korea's crypto scene is buzzing, with Q1 outflows hitting a whopping 57 trillion won, and stablecoins taking the lead. According to Democratic Party lawmaker Min Byung-duk, a good chunk of that money - almost half - was in stablecoins like Tether and USDC.
The exodus of these digital dollars started from five major South Korean crypto exchanges: Upbit, Bithumb, Coinone, Cobbit, and Gopax. Stablecoins, it seems, are the preferred currency for buying tokens from overseas crypto exchanges like Binance or Bybit. However, the outflow of stablecoins slowed in March as the global crypto market showed signs of cooling down.
A Bright Future for Crypto ETFs in South Korea
Crypto enthusiasm in South Korea isn't limited to retail investors. In fact, the number of South Koreans owning crypto has surged, reaching 16.29 million people nationwide - that's roughly 32% of the population. And it's not just a passing trend; the number is expected to continue growing through early 2024.
The influence of crypto doesn't stop at regular folk, though. A staggering 20% of public officials have crypto assets in their portfolios. Some of these bigwigs hold key positions, like the Secretary General of the Labor-Management Development Foundation, the President of the Korean National Police University, and the Vice President of the Korea Water Resources Corporation.
South Korea's Crypto Game-Changers: ETFs
With the South Korean presidential hopeful Lee Jae-myung promising to approve crypto ETFs, it's clear that the country is paving the way for a more significant role in the global digital assets market. The proposed reforms include allowing ETFs linked to major cryptocurrencies and expanding the eligibility of corporate and institutional investors to participate in the crypto market.
The regulatory landscape in South Korea is evolving, with the Financial Services Commission (FSC) introducing a new framework from June 1, 2025. The emphasis is on risk mitigation while promoting innovation. The government aims to ban meme/zombie coins, cap daily sales, and put stricter liquidity and sales limits on exchanges. But it's not all about tightening the reins; non-profit entities are now legally able to engage with cryptocurrencies under certain conditions.
In summary, South Korea is stepping up its game, moving away from a cautious stance on crypto and embracing regulation that promotes innovation while protecting investors and market integrity. The green light for spot Bitcoin and Ethereum ETFs and the expansion of corporate participation signal a new era for crypto in South Korea.
- Binance and Bybit, two popular overseas crypto exchanges, appear to be benefiting from South Korea's preference for stablecoins like Tether and USDC, used for buying tokens.
- As the South Korean presidential hopeful Lee Jae-myung promises to approve crypto ETFs, there is a clear shift towards a more significant role in the global digital assets market by encouraging investment in instruments like Binance's ETF-linked cryptocurrencies.
- With the Financial Services Commission (FSC) introducing new regulations from June 1, 2025, South Korea's cryptocurrency scene will witness an evolution towards risk mitigation, allowing non-profit entities to engage with cryptocurrencies but also imposing caps on daily sales and stricter measures on exchanges like Binance.
