What happened?
South Korea’s major crypto exchanges transferred approximately 56.8 trillion won in cryptocurrencies overseas in Q1 2025, with stablecoins pegged to the U.S. dollar accounting for nearly half of these outflows. These stablecoins, like USDT and USDC, are preferred by traders for their price stability and are primarily used because they align with most international trading pairs that use the dollar. Despite the large outflow, there was also a significant influx of funds into South Korea, showing vibrant two-way trade activity.
Who does this affect?
This trend impacts South Korean crypto traders who benefit from the price stability of stablecoins and their compatibility with major global exchanges like Binance and Bybit. Additionally, local exchanges such as Upbit, Bithumb, and Gopax are heavily involved in managing these transactions, highlighting the importance of these platforms in the national crypto landscape. The general public interested in crypto investments, as well as policymakers, are also affected since these dynamics can influence national economic policies and potential regulation efforts.
Why does this matter?
The substantial role of stablecoins in South Korea’s crypto outflows highlights their growing significance in the global crypto market. This dynamic could lead to increased regulatory scrutiny as authorities consider how to effectively manage these financial instruments within the broader financial ecosystem. Moreover, as stablecoins become pivotal in facilitating international crypto transactions, they might steer market strategies and investment flows, potentially affecting market liquidity and stability worldwide.