Shifting Dynamics in Korea’s Crypto Market: From Retail Speculation to Institutional Competition

Seoul’s Crypto Landscape Shifts from Retail to Institutional Dominance

Seoul, March 4 — As the sun rises over the bustling streets of Seoul, a significant transformation is underway in Korea’s cryptocurrency market. Once characterized by retail-led speculation, the sector is now witnessing a seismic shift towards institutional involvement, with banks, brokerages, and tech platforms racing to establish a foothold before regulatory frameworks are finalized.

According to a recent report by Tiger Research, which tracked 196 partnerships across 150 institutions, competition is intensifying on three key fronts: stablecoins, security token offerings (STOs), and custody services. “The current race for partnerships is less about gaining a first-mover advantage and more about shaping the regulatory landscape,” explains Kim Jeong-ho, a research analyst at Tiger Research. “Companies are positioning themselves to influence future regulatory standards.”

Stablecoins: A Legislative Stalemate

Stablecoins have dominated the legislative agenda, yet no related bills have passed the National Assembly. Key issues, including issuer eligibility and a proposed 20% cap on major shareholders in crypto exchanges, remain unresolved. Amid this uncertainty, tech giant Kakao is emerging as a formidable player. The company has formed a joint task force with KakaoTalk, KakaoBank, and Kakao Pay to develop a “super wallet,” leveraging its extensive reach in the Korean market.

Shinhan Card is also making strides, focusing on converting its existing payment network into blockchain rails after signing a memorandum of understanding with Solana in April. Meanwhile, major crypto exchanges are eager to expand their services; the inclusion of won-denominated stablecoins in the regulatory framework could allow them to broaden their digital asset offerings.

Dunamu, operator of Korea’s largest crypto exchange Upbit, is pursuing a won-denominated stablecoin business in collaboration with Naver Financial, while Bithumb, the second-largest exchange, is securing dollar stablecoin distribution channels through partnerships with Circle.

STOs: Laying the Groundwork for Future Growth

Brokerages are gearing up for the upcoming STO market, set to open in January 2027 following legal amendments. Hana Institute of Finance projects that Korea’s STO market could reach a staggering 367 trillion won ($242.8 billion) by 2030. Shinhan Securities is leading the charge, having launched Project Pulse, a blockchain-based platform designed to support the issuance and distribution of STOs. This year, the firm secured a major shareholder position in Nextrade, an alternative trading system, creating a comprehensive structure from issuance to trading.

Mirae Asset Securities is also making waves, having issued digital bonds in Hong Kong and obtained a retail digital asset license. The firm plans to launch a mobile trading system in June to cater to local retail investors.

Custody Services: Building Infrastructure Amid Losses

In the custody sector, four providers have established themselves, securing both domestic and international partnerships. However, many are still grappling with companywide losses as they await institutional capital to flow in. BDACS, based in Busan, is the most active player, expanding its infrastructure through collaborations with Woori Bank and overseas digital asset firms. BitGo Korea, backed by the global custody provider BitGo, and KODA, founded by KB Kookmin Bank, Hashed, and Haechi Labs, are also making significant strides in the market.

Exchanges Regain Strategic Value

Despite a recent slump in trading volume, crypto exchanges are regaining their strategic value as gateways for crypto-related services. Traditional financial firms and tech companies are increasingly securing stakes in major exchanges. The competition is particularly fierce around Dunamu, with Naver’s acquisition under review by the Fair Trade Commission (FTC). Hana Financial Group and several Samsung affiliates have acquired stakes in Dunamu, while Mirae Asset Group has taken a 92% stake in Korbit.

As overseas crypto companies recalibrate their strategies, the focus is shifting from retail community-building to partnerships with major firms. Collaborations like Solana’s partnership with Shinhan Card and Avalanche’s ties with Mirae Asset signal a new era in Korea’s crypto landscape.

As the regulatory framework looms, the race for dominance in Korea’s evolving crypto market is just beginning, promising a future where institutional players take center stage.