The South Korean won has surpassed the U.S. dollar as the leading currency for trading crypto worldwide.
According to a recent report by the research firm Kaiko, transactions involving the Korean won on centralized cryptocurrency exchanges reached $456 billion in the first quarter of 2024. This figure slightly edged out the $445 billion traded in dollars during the same period.
The shift in trading dominance is partially attributed to aggressive competition among South Korean exchanges. Notably, smaller platforms like Bithumb and Korbit have implemented zero-fee trading offers to divert market share from Upbit, which currently leads the market with over 80% control of spot trading volumes.
Market insights from Bloomberg suggest that South Korean traders prefer smaller, more speculative digital currencies, known as altcoins, rather than the more established cryptocurrencies such as Bitcoin and Ether. These two altcoins represent over 80% of the country’s trading activity.
The intense interest in cryptocurrencies has also influenced political discourse in South Korea. In the recent parliamentary elections, crypto regulation became a significant topic, with candidates proposing policies to postpone taxes on digital assets and ease restrictions on U.S. Bitcoin ETF investments to attract younger voters.
Following the $40 billion downfall of the TerraUSD stablecoin, developed by Do Kwon, South Korean regulatory bodies have announced plans to introduce more stringent rules to enhance investor protection, set to take effect in July. Despite ongoing regulatory moves, the country’s crypto adoption has been growing. One of the leading exchanges, Crypto.com, recently announced its plans to launch services for retail traders in the country.