The appetite for digital currencies in South Korea is rapidly expanding, reflecting a burgeoning interest among retail investors who are keen on increasing their stakes in cryptocurrencies over the next year.
According to a recent study by the Hana Financial Research Institute, which surveyed 1,000 individuals aged 20 to 59, findings reveal that approximately 27% of participants already own digital assets. Moreover, a striking 70% of all respondents, along with 86% of current asset holders, plan to boost their cryptocurrency investments.
This surge in interest coincides with a noticeable shift in the political landscape, suggesting enhanced regulatory support that may further drive digital asset adoption, especially through initiatives promoting stablecoins pegged to the won.
Interestingly, the enthusiasm is not confined to younger demographics. The research indicates that individuals in their 40s represent the largest group of crypto holders, comprising 31% of current investors.
While younger investors often engage in speculative trading, those in their 50s primarily view digital assets as a strategy for retirement savings. There are also notable gender differences in ownership, with men being roughly twice as likely as women to invest in cryptocurrencies.
Amidst the growing adoption, concerns regarding market volatility remain. However, only one-third of respondents highlighted security concerns, despite half of them keeping their assets in hot wallets associated with exchanges.
Regulatory Enhancements Fueling Retail Interest
The increasing fascination with cryptocurrencies is happening in tandem with rising enthusiasm for companies focused on stablecoin innovations. This trend surged following the election of President Lee Jae-myung, who took office in June.
President Lee has committed to legalizing the issuance of won-based stablecoins, arguing that such measures could help lower trading expenses, diversify foreign exchange risks, and promote greater global investor engagement in the South Korean economy.
Lawmaker Min Byeong-deok, who directed digital asset policies during Lee’s campaign, supports these arguments, suggesting that regulatory clarity could significantly enhance economic opportunities.
A parliamentary proposal currently in the works aims to permit local companies with a minimum capital of 500 million Korean won (around $367,000) to issue won-backed stablecoins.
This proposed legislation mirrors aspects of the GENIUS Act, which is presently under scrutiny in the United States, yet the Korean version specifies explicit capital requirements.
In contrast, the GENIUS Act lacks a mandated minimum equity threshold, albeit placing stricter regulations on issuers with market caps above $10 billion.
International Investments Show Growing Assurance
The passion for stablecoins among South Korean retail investors is also mirrored in their foreign stock investments. Following its public offering, Circle, the organization behind USDC, has emerged as a prime overseas equity choice among local retail traders, having garnered approximately $443 million, as reported by Bloomberg.
As South Korea’s regulatory frameworks continue to adapt, both retail and institutional investment activities are likely to become increasingly pivotal in shaping the country’s crypto landscape.
Image produced with DALL-E; Chart sourced from TradingView
