South Korea’s cryptocurrency market, well-known for its focus on retail spot trading, is experiencing a noticeable slowdown.
The country’s daily stablecoin trading volume exceeded ₩1 trillion ($730 million) at the end of last year. Since then, it has shrunk to around ₩200 billion ($146 million) by June—an 80% drop in just six months.
Why Did the Trading Volume Drop?
According to data submitted to lawmaker Park Sung-hoon of the People Power Party, the average daily domestic stablecoin trading volume was ₩238 billion in June. The National Assembly Research Service provided this data.
This figure aggregates the total trading volume of US dollar-pegged stablecoins like USDT, USDC, and USDS. The data comes from South Korea’s five major crypto exchanges: Upbit, Bithumb, Korbit, Coinone, and Gopax.
Domestic stablecoin trading volume steadily increased from ₩174.1 billion in July last year to ₩304.1 billion in October and ₩638.1 billion in November. It then surged to ₩1.02 trillion in December.
However, the trend reversed sharply this year. Volumes fell to ₩923.8 billion in January, ₩879.4 billion in February, and then dropped to the ₩300 billion range from March to May before hitting the ₩200 billion range in June.
Stark Contrast to Global Markets
Stablecoins are designed to maintain a stable value pegged to a fiat currency like the US dollar. Thus, they serve as a medium for payment and exchange in the crypto market.
Therefore, a decline in stablecoin trading volume can be interpreted as a contraction of overall investment, which also signals a decline in trading activity.
Unlike global markets, South Korea‘s limited use of stablecoins is cited as a reason for the decreasing trading volume. Globally, stablecoins are increasingly used to invest in crypto derivatives like perpetual futures and make real-world payments.
As a result, the global stablecoin market cap and trading volume have been growing rapidly this year. However, cryptocurrency derivatives trading is banned in South Korea.
Furthermore, credit card payments dominate the market, accounting for nearly 70% of all payment transactions. This makes stablecoin-based payments a minor part of the economy.
Crypto Holdings and Trading Volume Also Fall
South Korea’s overall cryptocurrency trading volume and domestic crypto holdings declined during this period. According to the Financial Stability Report published by the Bank of Korea last month, the average daily domestic crypto trading volume was ₩3.2 trillion in June.
This was an 80% decrease from ₩17.1 trillion in December last year. Domestic crypto holdings also dropped from ₩121.8 trillion at the end of January to ₩89.2 trillion by June.
The Bank of Korea stated that domestic stablecoin growth has recently slowed down due to the sluggishness of the virtual asset market.
The report also suggested that the “Trump effect”—the expectation of pro-crypto policies—was strong at the beginning of the year but appears to have largely faded.
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