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South Koreans have been holding onto their crypto assets on domestic exchanges, with a total worth of approximately $73.4 billion, according to data from the Bank of Korea (BOK). This marks a significant increase from previous months, with the total market capitalization of crypto assets held in domestic wallets surpassing the 100 trillion won mark ($70.5 billion) in December 2024.
The surge in crypto holdings in South Korea can be attributed to several factors, including the election of Donald Trump as the President of the United States in November 2024. Experts believe that Trump’s crypto-related promises sparked a flurry of crypto purchases in the country, leading to a 2.2x increase in holdings from October to December 2024.
The BOK’s latest payment settlement report highlighted the significant growth in transaction volumes following the US presidential elections. The average daily transaction volume reached 17.2 trillion won ($12.1 billion) in the last days of 2024, marking a five-fold increase from October.
While Trump’s election played a significant role in driving crypto market growth, the BOK also noted that domestic conditions in South Korea contributed to the surge in crypto holdings. The implementation of the Virtual Asset User Protection Act in July, which aimed to enhance user protection and prevent unfair trading practices, laid the groundwork for the crypto market’s expansion.
However, political turmoil in the country, including President Yoon Suk-yeol’s attempt to impose martial law in December 2024, disrupted the progress of crypto sector reform. Despite the setbacks, regulators and lawmakers have pledged to revisit the issue after the presidential elections in June.
The BOK anticipates further progress in crypto sector reform, including the launch of crypto assets and stablecoins on the domestic market. Regulatory obstacles preventing companies from using their balance sheets to purchase Bitcoin and other tokens are expected to be lifted in the coming months.
The BOK also highlighted the need for stablecoin regulations to address the potential negative impacts on central bank policies and financial stability. The bank pledged to actively participate in discussions on stablecoin legislation and collaborate with the Virtual Asset Committee to shape South Korean crypto policy.
Overall, South Koreans’ increasing crypto holdings reflect a growing interest in digital assets and a shifting regulatory landscape in the country. As the crypto market continues to evolve, stakeholders are working towards creating a more robust regulatory framework to support the industry’s growth.