South Korea Sees $40.6B Crypto Surge Led by Stablecoins

Nearly half of South Korea’s massive first-quarter cryptocurrency outflows consisted of stablecoins, as investors increasingly move digital assets to international exchanges despite growing domestic adoption.

South Korea experienced substantial cryptocurrency outflows in the first quarter of 2025, with approximately 56.8 trillion won ($40.6 billion) leaving the country’s major exchanges, according to data released by Democratic Party lawmaker Min Byung-duk citing the Financial Supervisory Service.

Stablecoins Lead The Exodus To International Platforms

Stablecoins like Tether (USDT) and USD Coin (USDC) accounted for 47.3% of the total outflows, representing 26.87 trillion won ($19.2 billion) of the funds transferred abroad, according to Tron Weekly.

The prevalence of stablecoin transfers highlights their crucial role as bridges between domestic and international cryptocurrency markets. These dollar-pegged assets have become the preferred method for South Korean traders accessing global platforms like Binance and Bybit.

“Stablecoins are frequently utilized on international platforms such as Binance and Bybit for trading as well as buying digital assets. This makes stablecoins an ideal option to conduct international transfers,” notes Bitcoin Ethereum News.

Domestic Adoption Continues Despite Outflows

The substantial outflows come even as South Korea’s domestic cryptocurrency adoption continues to surge. As of February 2025, more than 16.2 million South Koreans—approximately 32% of the country’s population—held cryptocurrency accounts, surpassing the number of stock market investors in the country.

This strong domestic adoption spans all sectors of society, including public officials. According to South Korea’s Ethics Commission for Government Officials, 411 out of 2,047 officials covered by disclosure rules declared cryptocurrency holdings valued at approximately 14.4 billion won ($9.8 million).

“This level of involvement from public officials highlights how integrated cryptocurrency has become in the country’s financial culture,” reports FinTech Weekly. The publication notes that such widespread adoption reflects a normalization of crypto ownership even among traditionally conservative sectors of society.

Trading Volume Decline Amid Market Cooling

Despite the growing number of cryptocurrency holders, South Korea’s major exchanges have seen a decline in trading volumes. Upbit, the country’s dominant exchange, experienced a 34% drop in trading volume from Q4 2024 to Q1 2025, falling from $561.9 billion to $371 billion according to CoinGecko data.

March specifically saw a slight dip in stablecoin outflows as global crypto markets cooled and trading volumes on foreign exchanges declined. This shift demonstrates the influence of broader market conditions on user behavior, with traders adapting strategies in response to changing market dynamics.

“With the global market going cold and trading volume on foreign exchanges plummeting, the outflows were reduced,” reports Tron Weekly, highlighting how market conditions affect capital flows.

Regulatory Landscape Continues To Evolve

The massive outflows come as South Korea’s regulatory approach to cryptocurrencies continues to evolve. The country’s Financial Services Commission (FSC) recently unveiled plans to allow corporate entities to open crypto trading accounts in phases by late 2025, starting with charities and universities.

This regulatory development aims to address a limitation in South Korea’s current financial system. The country’s real-name financial transaction requirement, introduced in 1993 to combat tax evasion and money laundering, has effectively shut out both overseas users and domestic companies from trading on South Korean exchanges.

Cryptocurrency trades exploded in 2017, driven partly by anonymous accounts from businesses, foreigners, and minors. The new regulatory roadmap aims to create a formal structure for institutional participation under tighter compliance standards.

Future Growth And Market Impact

Industry analysts speculate that South Korea’s cryptocurrency user base could reach 20 million by the end of 2025, though the pace of growth may slow as the market matures. With such a large portion of the population already involved, further expansion may require exchanges to offer new products, better education, and improved user experiences.

South Korea’s crypto economy continues to maintain its position as one of the most active in the world, with the $70.3 billion in crypto assets held by South Korean users placing the country among global leaders in retail crypto ownership.

The substantial outflows to international exchanges, coupled with expanding domestic adoption, highlight South Korea’s multifaceted relationship with cryptocurrencies—embracing the technology locally while participating in the broader global market through stablecoin bridges.