In a significant development, the South Korean won has overtaken the U.S. dollar as the primary currency for trading cryptocurrencies worldwide.
A recent report by the research firm Kaiko reveals that transactions involving the Korean won on centralized cryptocurrency exchanges totaled $456 billion in the first quarter of 2024. This amount slightly surpassed the $445 billion traded in dollars during the same period.
The shift in trading dominance can be attributed in part to fierce competition among South Korean exchanges. Smaller platforms like Bithumb and Korbit have introduced zero-fee trading offers to attract market share away from Upbit, which currently commands over 80% of spot trading volumes.
Insights from Bloomberg suggest that South Korean traders show a preference for smaller, more speculative digital currencies, known as altcoins, over more established cryptocurrencies like Bitcoin and Ether. These altcoins account for over 80% of the country’s trading activity.
The heightened interest in cryptocurrencies has also influenced political discussions in South Korea. During the recent parliamentary elections, crypto regulation emerged as a significant topic, with candidates proposing policies to defer taxes on digital assets and relax restrictions on U.S. Bitcoin ETF investments to appeal to younger voters.
In response to the $40 billion collapse of the TerraUSD stablecoin, developed by Do Kwon, South Korean regulatory bodies have announced plans to implement stricter rules aimed at enhancing investor protection, scheduled to take effect in July. Despite these regulatory developments, crypto adoption in the country continues to grow. Leading exchange Crypto.com has announced intentions to launch services for retail traders in South Korea, further indicating the nation’s increasing involvement in the cryptocurrency space.
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