South Koreans are HODLing crypto assets worth around $73.4 billion on domestic crypto exchanges, the nation’s central bank has claimed.
Busan Ilbo reported that the total market capitalization of the crypto held in domestic wallets surpassed the 100 trillion won mark ($70.5 billion) for the first time in December 2024, per Bank of Korea (BOK) data.
Koreans HODLing Billions of Dollars on Domestic Platforms
The BOK published the data in its latest payment settlement report. This, the media outlet noted, is the largest monthly total since the BOK began publishing crypto-related data.
Experts appear to agree that the election of Donald Trump to the White House in November 2024 sparked a flurry of crypto purchases in South Korea.
The December figure increased by 987 million compared to November. At the end of October last year, weeks before the US presidential election, South Koreans HODLed “only 58 trillion won ($41 billion).”
The x2.2 rise in the two months from October to December 2024 was due largely to President Trump’s “crypto-related manifesto promises,” the outlet added.
Transaction volumes also spiked after the elections, the BOK noted. The average daily transaction volume hit the 17.2 trillion won ($12.1 billion) mark in the last days of 2024. This marked a five-fold rise on October’s volume figures.
Trump Not the Only Factor Spurring Growth, BOK Says
However, the bank suggested that domestic conditions also proved conducive to crypto market growth at the end of 2024.
The BOK’s report noted that the Virtual Asset User Protection Act, a law that includes several clauses pertaining to crypto user protection and unfair trading, came into force in July.
Lawmakers were due to begin work on “second-stage” discussions to improve the act in November the same year.
Ultimately, this process was largely derailed by the political chaos that ensued after President Yoon Suk-yeol’s attempt to impose martial law on December 3.
However, regulators and lawmakers alike have vowed to return to the matter of crypto sector reform after June’s presidential elections.
And the BOK suggested that it also expects progress in this area before the year is out.
Many industry insiders have expressed dismay at the fact that South Korean companies are still unable to launch cryptoassets or stablecoins on the domestic market.
Firms are also still blocked from using their balance sheets to buy Bitcoin (BTC) and other tokens. However, regulators have indicated that this is likely to change before the year is out.
Critics claim that the delay has allowed the US and Japanese crypto sectors to grow while South Korea’s blockchain industry stagnates.
Stablecoin Regulations Ahead
The BOK’s report suggested that regulatory obstacles are set to be removed in the months ahead.
The bank wrote that a stablecoin regulatory “system” was likely on its way. But the BOK expressed concerns about the rise of stablecoins, writing:
“Unlike conventional virtual assets, stablecoins have the inherent characteristics of a means of payment. If they are widely issued and circulated and used as a means of payment to replace legal tender, they may have negative effects on the implementation of central bank policies. Monetary policy, financial stability, payments, and settlements could all be affected. A separate regulatory ecosystem is needed.”
The bank promised to “actively participate in future discussions on stablecoin legislation.”
It said it intended to liaise with the Virtual Asset Committee, a regulatory advisory body designed to form South Korean crypto policy.
The BOK said it would provide the committee with “opinions on the direction of stablecoin regulation from a central bank’s perspective.”
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