South Korea’s cryptocurrency market has seen a slowdown in trading activity, even as institutional development continues to expand.
A new report from CoinGecko shows that the sector is gradually moving from speculative trading to regulation, stablecoin development, and corporate adoption. Although currency trading volumes are down, banks, policymakers and technology companies continue to build infrastructure for long-term use.
According to the report, South Korea has been found to be an important market for stablecoins that are not denominated in US dollars. Additionally, regulators, exchanges, and financial institutions have indicated their involvement in developing payment systems based on blockchain technology.
Trading volumes cool as investors change strategies
South Korea’s five major virtual currency exchanges recorded a decline in activity in the first quarter of 2026, with average monthly trading volume decreasing from 125.2 trillion won in the second half of 2025 to 98.1 trillion won.
However, this decline does not clearly indicate a decline in interest in digital assets. In fact, investors appear to be holding on to their assets for a longer period of time, even though speculative trading remains subdued. During the period, Bitcoin primarily traded between $60,000 and $72,000.
At the same time, traditional markets attracted new influxes. Samsung Electronics and SK Hynix benefited from strong demand from growth in artificial intelligence and semiconductors. As a result, some investors shifted their risk exposure from cryptocurrencies to stocks and leveraged semiconductor exchange-traded funds.
Stablecoins become the new battlefield
Stablecoins are currently one of the main topics in Korean digital asset planning. The next stage of the Digital Asset Basic Law will focus on determining who will be authorized to issue stablecoins based on the Korean won.
While the Bank of Korea wants stablecoin issuance to be handled by commercial banks, the Financial Services Commission is advocating a broader approach within its regulations.
As regulators deliberate on the framework, companies are moving forward with their own plans. KRWQ, the Wonpeg stablecoin developed by IQ and Frax, achieved a daily trading volume of 1 billion won in April 2026.
Advances in regulation and infrastructure
South Korean regulators are tightening their scrutiny after Bithumb accidentally transferred Bitcoin during a promotional event.
These agencies impose stricter operating guidelines on exchanges, such as requiring exchange ledgers to be reconciled every five minutes and monthly audits.
At the same time, Dunamu launched GIWA, an Ethereum layer 2 network designed for institutional payments. Regulators are also working on a framework for cryptocurrency exchange-traded funds and rules that would allow for greater corporate participation in digital asset investing.
