South Korea's Stablecoin Holdings Plunge as Currency Weakens
By John Nada·Mar 23, 2026·5 min read
South Korea's stablecoin balances have plummeted by 55%, driven by a weakening won and a shift toward domestic equities, impacting crypto market liquidity.
South Korea is witnessing a significant decline in stablecoin balances, with on-chain data indicating a 55% drop since July 2025. This downturn coincides with the Korean won's depreciation, falling past 1,500 per dollar in mid-March, a level not seen since the 2008 financial crisis.
The total stablecoin holdings on South Korea’s five largest crypto exchanges have decreased from $575 million to approximately $188 million as of mid-March. This outflow reflects a broader trend of capital migration from crypto markets to domestic equities, as traders convert dollar-denominated assets into won, seeking opportunities in local stocks.
On-chain data shows that since the beginning of July, stablecoin balances in South Korea have faced a sharp drawdown, with the latest wave of outflows being closely tied to the weakening of the won against the dollar. As of March 23, 2026, the total amount of tokenized versions of fiat currencies held in wallets linked to the major crypto exchanges in South Korea has plunged by a staggering 55%.
The combined stablecoin holdings across exchanges such as Upbit, Bithumb, Coinone, Korbit, and GOPAX have dropped from $575 million in July 2025 to roughly $188 million by mid-March. This decline has accelerated sharply as the Korean won slid to 16-year lows against the dollar, highlighting a critical turning point in the market dynamics.
The timing of this decline suggests that traders have been selling off Tether and other stablecoins at elevated USD/KRW levels, particularly after the won weakened past the 1,500-per-dollar threshold. This level is significant as it has not been seen since the financial turmoil of 2008, amplifying the urgency for traders to exit dollar-denominated holdings. According to DNTV Research founder Bradley Park, the weaker currency has provided a strong incentive for traders to convert their assets into won and redeploy them into domestic investments.
This shift in capital is indicative of a broader migration of Korean retail capital from cryptocurrencies into equities, a trend that CoinDesk first documented back in November. While the earlier rotation towards equities was largely driven by the narrative surrounding AI-linked chipmakers and the fading momentum of altcoins, the latest drawdown appears to be more directly tied to specific foreign exchange triggers rather than a general change in risk appetite among investors.
The South Korean government has intensified its efforts to attract domestic investment through new policies aimed at repatriating foreign assets. One of the innovative measures includes the introduction of “repatriation” accounts that offer up to 100% capital gains tax exemptions for investors who sell their overseas assets and reinvest them locally. These policy shifts are designed to encourage a rotation of capital back into the domestic market, and they seem to be bearing fruit.
Evidence of this capital rotation can be seen in recent brokerage data, which indicates a significant decline in investor deposits—an important proxy for the cash available to buy stocks. Investor deposits in brokerage accounts fell sharply from approximately ₩131 trillion ($86 billion) in early March to around ₩112 trillion ($74 billion) following the mid-month currency move. This decline suggests that capital is being actively deployed into equities, which is further corroborated by the simultaneous decline in stablecoin balances.
As the equity market rallies, the KOSPI index, which has already seen a remarkable increase of 75% in 2025, continued to gain an additional 37% this year, making it the best-performing major index globally. However, this rally is highly concentrated, with major players such as Samsung Electronics and SK Hynix accounting for roughly half of the market capitalization and more than 50% of the projected profits in the sector. This concentration raises questions about the sustainability of the current rally, especially if investor sentiment shifts.
Broader trends in stablecoin transaction volumes across Asia have also been observed, with data from Artemis indicating an uptick over the last year. This suggests that the drawdown in Korean exchanges is likely a reflection of domestic capital rotation rather than a region-wide pullback in interest towards stablecoins. The movement of capital from crypto to equities underscores the changing preferences of investors in South Korea as they seek more stable and immediate returns in a fluctuating currency environment.
For the crypto markets, this shift represents a significant loss of one of their most important retail liquidity pools. Korean participation in the crypto market has historically played a crucial role in amplifying market cycles, contributing both to price surges and dips. However, the current data indicates that capital is not sitting idle; instead, it is being actively redeployed into domestic equities. The question now remains whether these flows will return to the crypto market, which may depend less on overarching crypto narratives and more on the sustainability of Korea’s equity rally.
Recent trends indicate that the KOSPI index has come under pressure as well due to geopolitical concerns, particularly disruptions in oil transits through the Strait of Hormuz, which have sparked energy supply worries. Such external factors could potentially create a ripple effect, causing a reallocation of capital back into cryptocurrencies if the equity market experiences a significant correction. The concentration of the KOSPI rally in a few key semiconductor stocks makes it particularly vulnerable to these kinds of shocks.
As the market stands, the interplay between the stablecoin decline and the equity market surge creates a complex landscape for investors. The volatility of the won adds another layer of uncertainty, forcing traders and investors to continuously reassess their strategies in response to both domestic and international market conditions. The outcome of this ongoing situation will likely shape the future trajectory of both the South Korean crypto market and its broader financial landscape.