Here's something weird happening in Seoul's crypto scene. While USDT and USDC are basically becoming the new dollar of crypto worldwide, Korean exchanges are watching their stablecoin trading volumes absolutely crater. We're talking about a drop from 1 trillion won per day in December 2024 to just 238 billion won by June 2025.
Yeah, that's an 80% nosedive in six months.
And here's the thing – it's not just because Korean traders suddenly lost interest. There's something much more fundamental going on here that people outside Korea rarely understand.
The Trading Pattern That Makes No Sense If You're Not Here
Spend any time in Korean crypto trading communities, and you'll notice something strange pretty quickly. Nobody really talks about using stablecoins for anything fancy. No derivatives plays. No yield farming strategies. No arbitrage tricks across exchanges.
Actually, they can't do any of that stuff.
Look, back in 2017, Korea just... banned crypto derivatives. The whole thing. The Financial Services Commission basically said "crypto isn't a real financial instrument under our laws, so no futures, no options, nothing." All the big brokerages that were getting ready to launch Bitcoin futures? They just quietly walked away from those plans.
So while your typical trader in Singapore or New York is using stablecoins as margin collateral, settling perpetual contracts, and parking funds in DeFi protocols, Korean traders are stuck with the basics. Buy some Bitcoin with USDT. Sell it back to USDT later. That's pretty much it.
The numbers tell the story. Korea's big five exchanges – Upbit, Bithumb, Korbit, Coinone, and Gopax – saw daily stablecoin trading go like this:
- July 2024: 174 billion won (pretty quiet)
- December 2024: 1.02 trillion won (everyone's excited, Bitcoin's pumping)
- January 2025: 924 billion won (starting to cool off)
- June 2025: 238 billion won (ouch)
See the pattern? Trading exploded when Bitcoin rallied globally at the end of 2024, then just collapsed way harder than you'd expect from normal market cooldown. Total crypto trading in Korea fell from 17.1 trillion won daily in December to 3.2 trillion won by June – that's 81% gone. Stablecoins followed that drop, but somehow did even worse.
The Banking System That Confuses Everyone
Okay, this is where Seoul's setup gets really different. Every single crypto exchange here requires you to link a real-name bank account. Not like "hey, maybe verify your identity if you want." No, it's mandatory infrastructure. Been that way since 2021.
What does this actually mean when you're trading? Your Korean won goes into the exchange through your verified bank account. You convert it to crypto or stablecoins. You trade. Then you convert back to won and withdraw through that same verified channel. Everything's traceable. Everything's monitored. The financial authorities can see all of it.
Now compare that to how things work basically everywhere else. Traders keep funds sitting in stablecoins between trades. They move assets between exchanges using blockchain transfers. They use stablecoins for payments or sending money internationally. Korean traders? Can't really do any of that at scale without triggering compliance reviews.
And honestly? Koreans don't really need stablecoins for payments anyway. About 70% of all payments here go through credit cards. You've got Samsung Pay, Kakao Pay, Naver Pay – digital payment infrastructure is so dialed in that paying with USDT would actually be more complicated. Nobody needs crypto to buy coffee in Gangnam when you can just tap your phone everywhere.
The Weird Situation With Tourist ATMs
This one's kind of funny, actually. Starting this year, Seoul put Digital ATMs in tourist areas – Namsan Tower, Myeongdong, Centum City, places like that. Foreign tourists can roll up, show their passport, do a quick facial recognition check, and convert their USDT to Korean won. Super smooth.
Korean citizens trying to do the same thing? Nope. Not allowed. The DTM operators straight-up say the service is foreigners-only because of regulatory constraints.
So you end up with this bizarre scenario. A tourist from Singapore lands at Incheon with some USDT, converts it to won at a DTM, and goes shopping. Meanwhile, a Seoul resident with the exact same USDT has to go through their exchange account tied to their real-name bank account, which means full visibility to tax authorities and financial regulators.
Makes sense? Not really. But that's how it works.
The Bank Consortium That Might Not Change Much
In April, Korea's big banks – KB Kookmin, NH Nonghyup, Shinhan, and Woori – got together to explore launching a KRW-backed stablecoin. Government officials were like "yeah, we're open to talking about it." Fintech companies started filing trademark applications for Korean won stablecoin names left and right.
But here's the problem nobody wants to say out loud: The Bank of Korea is pretty clear that only they're supposed to issue currency. It's like, literally in the constitution. Private companies issuing something that's basically Korean won? That potentially messes with the whole monetary policy thing.
The Bank of Korea's solution? Project Hangang – testing a wholesale central bank digital currency for banks to settle transactions with each other, and then regular banks can issue "deposit tokens" on top of that infrastructure. Basically regulated stablecoins, but through the banking system where they can control everything.
If this happens, these bank-issued stablecoins would have all the usual banking regulations attached. Capital requirements, deposit insurance, transaction reporting, the works. They'd technically be stablecoins, but legally they'd be banking products with a blockchain wrapper.
What This Actually Means
The 80% collapse? It's showing us something important about Korea's position in crypto. Globally, stablecoins are the infrastructure layer – they're how people trade between cryptos, they're collateral, they earn yield in DeFi. In Korea, they're basically just temporary holding spots during trades.
When the overall crypto market slowed down in early 2025, Korean traders had almost no reason to keep large stablecoin balances. Can't use them for derivatives. Can't really participate in DeFi (most platforms don't integrate with Korean exchanges because of regulatory uncertainty). Can't use them for payments in any practical way.
And the regulations? Yeah, those aren't changing anytime soon. The Financial Services Commission still stands by its 2017 derivatives ban. Real-name accounts are staying mandatory. The Bank of Korea isn't backing down on the whole monetary sovereignty thing.
Meanwhile, the global stablecoin market hit $300 billion in October 2025. USDT and USDC are everywhere – payments, remittances, trading infrastructure. Korean trading makes up maybe 0.3% of global stablecoin activity, despite having 18.25 million registered exchange accounts as of December 2024.
Kind of wild when you think about it.
What Outside Observers Should Actually Know
Korean crypto markets are basically a live experiment in how regulation shapes what people actually do with digital assets. Stablecoins aren't banned here. Trading isn't restricted. But the way everything's set up – the mandatory real-name accounts, no derivatives, payment infrastructure that already works great, central bank being cautious about private issuance – it all creates natural limits on what stablecoins are actually useful for.
The volume collapse isn't really about traders being pessimistic or scared. It's about Korean stablecoins just having fewer practical uses than they do everywhere else, which makes them less sticky when markets cool down. When there's not much reason to hold an asset between trading sessions, volumes naturally drop harder during bear markets.
If you're trying to understand Korean crypto flows from outside, you really need to get these structural factors. Seoul's market operates under completely different rules, even when everyone's trading the same USDT or USDC that's listed globally. That's why Korean trading patterns often look weird compared to international trends, even though everyone's technically accessing the same cryptocurrencies.
It's not broken. It's just... different. And that difference matters a lot more than most people realize.
Disclaimer: This article is for educational and informational purposes only and should not be considered as financial, investment, or trading advice; always conduct your own research and consult with a qualified financial advisor before making any investment decisions.