South Korea’s cryptocurrency market has experienced a massive surge in stablecoin transactions, with top exchanges Upbit, Bithumb, Coinone, Korbit, and Gopax transferring approximately 56.8 trillion won ($40.4 billion) worth of digital assets overseas during the first quarter of 2025. Notably, stablecoins like USDT and USDC accounted for 47.3% of these outflows, totaling 26.87 trillion won ($19.1 billion).
The appeal of stablecoins is evident as traders leverage these dollar-pegged assets to access foreign exchanges such as Binance and Bybit, which primarily operate in USD-based trading pairs rather than the Korean won (KRW). This trend is not limited to South Korea. In Brazil, stablecoin transactions accounted for 71.4% of crypto volume in September 2024, with USDT alone representing $2.77 billion of the total.
However, the South Korean market also witnessed significant inflows. Between January and March, 64.78 trillion won ($46.1 billion) worth of digital assets were moved into domestic exchanges, including 26.9 trillion won ($19.1 billion) in stablecoins. This bi-directional flow highlights the growing importance of stablecoins in South Korea’s crypto economy, despite the lack of specific regulations.
Stablecoin Regulation on the Horizon: South Korea Moves Cautiously After Terra Collapse
South Korea’s crypto regulators are preparing to introduce comprehensive guidelines for stablecoins amid concerns over rising capital flows and potential market manipulation. The Financial Supervisory Service (FSS) has flagged stablecoin transactions as a key area of focus, citing the lessons learned from the 2022 Terra collapse, a catastrophic event that wiped billions from the market and undermined confidence in South Korea’s crypto sector.
Currently, South Korea has no specific framework for stablecoin oversight, but that may change as the consortium of top banks — including KB Kookmin, Woori, and NH Nonghyup — pushes to launch a Korean stablecoin later this year. This initiative aims to stabilize the domestic market and reduce reliance on foreign stablecoins.
Meanwhile, the Trump family’s USD1 stablecoin, launched through World Liberty Financial, has rapidly gained prominence, reaching a market cap of $2.12 billion, making it the seventh-largest stablecoin globally. Its sudden rise has raised concerns among regulators worldwide, as questions about transparency and regulatory oversight loom over the project.
Crypto Election Dynamics: Stablecoins in the Spotlight Amid Upcoming Presidential Vote
South Korea’s rapidly expanding stablecoin market has also entered the political arena, with presidential candidates vowing to address crypto regulations ahead of the June 2025 election. Lee Jae-myung, the leading opposition candidate, has proposed reducing crypto transaction fees and supporting Bitcoin spot ETFs to attract more institutional investors.
Meanwhile, his opponent, Kim Moon-soo, of the ruling People Power Party (PPP), has outlined a more aggressive stance, proposing direct crypto investments by public institutions, including state pensions and sovereign wealth funds.
Analysts say that the outcome of the election could significantly impact the stablecoin market, as each candidate presents contrasting visions for the country’s crypto landscape. With South Korea already emerging as a major player in the global crypto sector, the election will be a decisive moment for both traders and regulators, potentially reshaping the market’s trajectory for years to come.
