South Korea crypto liquidity falls as investors shift to stocks

Stablecoin balances on wallets linked to South Korea’s five biggest crypto exchanges fell about 55% from July 2025 to mid-March, as local investors appeared to move cash into equities after the won weakened.

Allium Labs data tracking Ethereum and Tron wallets for Upbit, Bithumb, Coinone, Korbit, and GOPAX shows holdings dropping to about US$188 million from US$575 million, with outflows picking up after the won broke past 1,500 per US dollar.

DNTV Research founder Bradley Park said traders likely sold dollar-pegged tokens at higher USD/KRW levels, converted to won, and redeployed into domestic assets.

Brokerage deposits fell to about ₩112 trillion from ₩131 trillion in early March, while Artemis data shows stablecoin volumes across Asia rose, suggesting the pullback was Korea-specific.

🔗 Source: CoinDesk

🧠 Food for thought

Implications, context, and why it matters.

Government tax breaks and a historic stock rally pull funds from stablecoins into Korea

Stablecoin outflows arrived alongside new South Korean tax breaks meant to bring money back into Korea 1.
A temporary program gives a capital gains tax break to investors who sell overseas stocks held as of Dec. 23, 2025, convert proceeds into won, and buy South Korean equities for at least one year 2.
The benefit tops out at 50 million won per person, with the richest terms tied to sales in the first quarter of 2026 3.
The rollout matched a jump in the KOSPI index past 6,000 points, fueled by a semiconductor surge that lifted Samsung Electronics and SK Hynix to nearly 40% of the market’s value 4, 5.

Korea’s stablecoin pullback hints at how policy can steer capital flows

The shift offers a real-world example of how national rules can move crypto-linked capital.
Officials leaned on tax perks to push repatriation into domestic assets, plus foreign-exchange-hedging-related tax benefits aimed at easing FX market strain rather than pushing sales of dollar-pegged tokens 2.
The approach could guide other countries facing capital flight, since offshore digital assets can still react to local economic policy 2.
Results also depend on an appealing home option, which here included a record stock rally led by semiconductor heavyweights 4.