South Korea’s cryptocurrency sector experienced a significant surge in stablecoin outflows during the first quarter of 2025, with major exchanges — including Upbit, Bithumb, and Korbit — transferring 56.8 trillion won ($40.4 billion) worth of digital assets abroad. According to a report by South Korea’s Financial Supervisory Service (FSS), nearly half of these transfers — 47.3% or 26.87 trillion won ($19.1 billion) — were conducted using USDT and USDC stablecoins.
The popularity of stablecoins is driven by South Korean traders seeking to access international markets like Binance and Bybit, where most trading pairs are denominated in U.S. dollars rather than the Korean won. This trend mirrors broader global patterns, with stablecoins increasingly serving as a bridge between crypto and traditional finance.
Interestingly, while outflows dominated headlines, 64.78 trillion won ($46.1 billion) worth of digital assets flowed into South Korea, indicating a two-way capital movement. This includes 26.9 trillion won ($19.1 billion) worth of inbound stablecoins, underscoring the rising demand for dollar-pegged assets despite ongoing regulatory uncertainties.
Regulatory Spotlight: Is South Korea Ready to Tackle Stablecoin Risks?
Despite the surge in stablecoin usage, South Korea has yet to implement comprehensive regulations targeting these digital assets. The FSS is expected to introduce stablecoin-specific guidelines later this year, potentially addressing concerns related to money laundering, price manipulation, and investor protection.
The urgency for regulation was underscored by the Terra stablecoin crash, a South Korean-originated project that caused widespread market disruptions in 2022. In a bid to prevent similar crises, a group of major South Korean banks, including NH Nonghyup, IBK Industrial, and KFTC, plans to launch a joint Korean stablecoin designed to mitigate volatility and maintain financial stability.
Meanwhile, the Trump family’s USD1 stablecoin has gained significant momentum, amassing a $2.12 billion market cap in just two months. Despite its rapid rise, the project has drawn scrutiny from regulatory bodies worldwide, raising questions about oversight and transparency in the stablecoin sector.
South Korea’s evolving regulatory landscape will be closely watched as the country prepares to implement stablecoin guidelines by late 2025, potentially reshaping the dynamics of its rapidly expanding digital asset market.
