Stablecoins Dominate Half of South Korea’s Q1 Crypto Outflows

In Q1 2023, South Korea’s crypto outflows reached nearly 57 trillion won, with stablecoins making up almost half of this amount. Stablecoins are popular for international transactions, particularly on platforms like Binance. The number of crypto account holders has surged, with 32% of the population engaged, including many public officials.

In the first quarter of 2023, South Korea experienced significant cryptocurrency outflows, totalling nearly 57 trillion won, or around $40.6 billion. Remarkably, stablecoins constituted almost half of these transfers as users opted to move funds to overseas exchanges. This information was brought to light by Democratic Party lawmaker Min Byung-duk, who discussed data obtained from the Financial Supervisory Service.

Out of the total amount transferred abroad, about 26.87 trillion won, equating to 47.3%, was in dollar-pegged stablecoins like Tether (USDT) and USD Coin (USDC). These stablecoins are likely favoured by users for their ease of transaction, especially for purchasing tokens on major international exchanges like Binance and Bybit. However, it’s worth noting that the outflow of stablecoins saw a decline in March, aligning with a slow down in the overall crypto market activity.

As the crypto landscape evolves, adoption in South Korea is on the rise. Data submitted to Rep. Cha Gyu-geun of the Rebuilding Korea Party indicates that as of February, around 16.29 million South Koreans, which is about 32% of the population, held crypto accounts. This statistic is based on user activity from the country’s five largest exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax. The trend demonstrates a consistent increase in crypto engagement moving into early 2024.

It’s not just retail investors participating either. Some statistics reveal that nearly one in five public officials who filed asset declarations this year have reported holding cryptocurrencies. Among 2,047 officials, 411 declared crypto-related assets. Notably, this group includes individuals in influential roles, such as the Secretary General of the Labor-Management Development Foundation, the President of the Korean National Police University, as well as the Vice President of the Korea Water Resources Corporation. This involvement by public officials highlights a growing intersection between government and the cryptocurrency ecosystem in South Korea.