Stablecoin Flood Swells to ₩26.9 T, 47 % of South Korea’s Q1 Crypto Outflows

Key Takeaways:Stablecoins drove 47% of South Korea’s Q1 crypto outflows.Foreign exchanges favor dollar-pegged stablecoins over Korean won pairs.South Korean voters rank crypto reform as a top election issue.South Korea’s top crypto exchanges transferred around 56.8 trillion won worth of cryptocurrencies overseas during the first quarter of 2025. Stablecoins pegged to the U.S. dollar, such as USDT and USDC, made up 26.87 trillion won or 47.3% of this total.Traders prefer stablecoins because they offer price stability and make it easier for South Korean traders to access foreign crypto markets like Binance and Bybit, where most trading pairs are listed in dollar-based stablecoins rather than Korean won (KRW).Is South Korea Ready to Regulate Stablecoins?According to a local news report on May 8, South Korea’s Financial Supervisory Service (FSS) identified Upbit, Bithumb, Coinone, Korbit, and Gopax as the leading platforms handling these transfers between January and March 2025.Money also flowed both ways.During the same period, 64.78 trillion won entered domestic exchanges, higher than the amount sent overseas. Around 26.9 trillion won worth of stablecoins were brought into the country. This shows a two-way movement, not just an outflow.South Korea’s stablecoin report mirrors global patterns. For instance, in November 2024, Brazil’s Internal Revenue Service reported that nearly 4.4 million Brazilians transferred $4.2 billion in cryptocurrency during September.JUST IN: Brazil's Central Bank is looking to ban stablecoin withdrawals, including Tether (USDT). With stablecoins making up 71% of crypto transfers, this could disrupt billions in transactions.— Jacob King (@JacobKinge) November 29, 2024Stablecoins made up 71.4% of this volume, with Tether’s USDT alone representing $2.77 billion. Amid this spike in interest, Itaú Unibanco, Brazil’s largest bank with over 55 million users, now considers launching a stablecoin.The Trump family also entered the market. They introduced a private stablecoin, USD1, through their venture, World Liberty Financial, and within two months of launch, it has become the seventh-largest stablecoin globally, with a market capitalization of $2.12 billion.Stablecoin growth has also reached new heights. For example, in March 2025, its total market value surpassed $230 billion. At press time, it stands at $242.222 billion, up $157.28 million over the past week.Stablecoin market cap is at $242 billion | Source: DefiLlamaMeanwhile, a consortium of South Korean banks plans to create a joint Korean stablecoin. This group includes KB Kookmin, Shinhan, Woori, NH Nonghyup, IBK Industrial, Suhyup, and the Korea Financial Telecommunications & Clearing Institute (KFTC).South Korean Banks Collaborate on Stablecoin Issuancehttps://t.co/1mzt78VgtW pic.twitter.com/yVyH4i56sv— Kimchi Premium (@kimchipump) April 24, 2025However, South Korea still lacks specific regulations for stablecoins, though plans are underway to establish them later this year. In addition, the failed Terra stablecoin project, which originated in South Korea, also serves as a cautionary tale. Will South Korea’s Crypto Boom Continue Amidst Election Crossroads?The latest Q1 crypto transactions report depicts the local market—South Korea’s crypto adoption is thriving.A recent survey found that over half of South Korean adults have previously traded or are still actively trading cryptocurrencies. This comprehensive study involved 2,500 men and women, aged 19 to 69, living across Seoul, Gyeonggi Province, and six other major cities. About 52% reported profits from crypto activities. Bitcoin ranked highest in popularity, capturing 76% of participants’ attention.In March, local news agency Yonhap added another layer to the story. It reported that 16.29 million South Koreans has registered accounts with crypto exchanges. Out of a population of 51.7 million, that’s nearly one in three people.These accounts span South Korea’s top five crypto exchanges, including Upbit, Bithumb, and Gopax. Meanwhile, crypto policies could be a major decider in South Korea’s upcoming presidential election, which is scheduled for June 3, 2025. The nation’s presidential candidate, Lee Jae-myung, promises to reduce crypto transaction fees and support the approval of Bitcoin spot ETFs if elected.Right now, South Korean exchanges are allowed to set their transaction fees. However, Lee’s administration might push for capped fees, potentially making trading more affordable.Lee’s statements counter his main opponent, Kim Moon-soo of the ruling People Power Party (PPP). Earlier this month, Kim proposed allowing South Korea’s state pension and sovereign wealth funds to invest directly in digital assets.His political party also introduced seven crypto-centered promises, including removing strict banking rules that currently hinder crypto exchanges. If enacted, this would open more doors for local and foreign traders and further elevate the South Korean crypto market.Frequently Asked Questions (FAQs)How do South Korea’s crypto rules impact public institutions’ digital asset engagement? South Korea’s new institutional crypto investment guidelines, set for phased rollout by Q3 2025, will allow public entities like universities and nonprofits to invest in digital assets with clear regulatory guardrails. For instance, universities can diversify endowments into blockchain ventures, and Nonprofits can accept and manage crypto donations more efficiently. How does South Korea’s crypto tax affect retail investors? South Korea will enforce crypto gains tax at 20% starting January 1, 2027. This tax applies only to annual earnings over 50 million won (about $36,000), a major increase from the previous 2.5 million won threshold. This policy protects small investors while ensuring only the largest gains face taxation, balancing market growth with fiscal responsibility. The post Stablecoin Flood Swells to ₩26.9 T, 47 % of South Korea’s Q1 Crypto Outflows appeared first on Cryptonews.