Stablecoin Trading Volume Hits Record High in South Korea

The first quarter of this year witnessed an unprecedented surge in stablecoin trading within South Korea's virtual asset exchanges, reaching a staggering 57 trillion won. This remarkable growth is attributed to the increasing popularity of dollar-based stablecoins following the U.S. presidential election.

Breakdown of Stablecoin Trading

Data from the Bank of Korea reveals that USDT dominated the market with 47.3311 trillion won (83.1%), followed by USDC at 9.6186 trillion won (16.9%), and USDS at a minimal 4.1 billion won (0.01%). These figures highlight the growing preference for stablecoins pegged to the U.S. dollar among Korean investors.

Regulatory and Monetary Implications

The Bank of Korea has been vigilant in monitoring these trends, emphasizing the potential risks to monetary policy effectiveness if won-based stablecoins are issued without stringent oversight. Governor Rhee Chang-yong advocates for a regulated approach, starting with the banking sector.

Future Directions

Amidst these developments, the Bank of Korea is also advancing Project Hangang, exploring the integration of central bank digital currency (CBDC) into everyday transactions, signaling a transformative phase in South Korea's financial landscape.