South Korean cryptocurrency exchanges are aggressively marketing U.S. dollar-pegged stablecoins to capitalize on surging demand driven by a weakening Korean won. According to industry officials, the sharp rise in the won-dollar exchange rate has led to a significant increase in trading activity for stablecoins like USDC and USDe, as investors seek assets pegged to the appreciating dollar. This marks a shift from past market rallies where digital assets were often overlooked.
Major exchanges have launched fee waivers and trading campaigns to boost volumes. Korbit announced a plan to waive all trading fees for USD Coin (USDC) transactions and is running a campaign through March, offering a share of a 25,000 USDC reward pool to traders who record at least 10 million won ($6,900) in weekly volume. Coinone is running a similar weekly campaign with an 8,000 USDC distribution. Meanwhile, the country's two largest exchanges, Upbit and Bithumb, have taken a different approach by listing new stablecoins, including Ethena USD (USDe), a synthetic dollar stablecoin from Ethena Labs. Upbit has launched a promotion offering free Ethena tokens to top USDe traders.
Data from CryptoQuant shows the tangible impact: when the exchange rate exceeded 1,480 won per dollar, trading volume for Tether (USDT) on major won-based exchanges hit 378.2 billion won, a 62% increase from January 1. An exchange official stated that stablecoins are now seen as a key tool for developing new revenue streams in the current market environment.
This surge in dollar-stablecoin activity coincides with South Korea's first legislative steps to regulate the sector. A bill proposed by Rep. Park Sung-hoon aims to bring stablecoins under the Foreign Exchange Transactions Act to combat money laundering and tax evasion, classifying them as legal means of payment. The Bank of Korea has echoed concerns that stablecoins could be used for unreported cross-border transactions.
In a parallel and potentially transformative development, a major private-sector consortium is forming to challenge the dominance of dollar-based stablecoins. Technology giant Samsung has entered a pivotal partnership with financial leaders Shinhan Financial Group and Hana Financial Group to develop a comprehensive framework for a Korean won-backed stablecoin. Reported by Maeil Business Newspaper, this alliance aims to leverage Samsung's technological expertise and global network alongside the banks' regulatory and financial infrastructure to create a credible digital won alternative.
The consortium's strategy is to initially focus on institutional and cross-border transactions, potentially operating alongside the Bank of Korea's separate CBDC trials. Analysts see the partnership as a strategic move for financial sovereignty, aiming to reduce dependency on dollar-pegged assets like USDT and USDC in cross-border trade, DeFi, and digital asset markets. The project faces significant challenges, including navigating domestic regulations like the Digital Asset Basic Act and building international liquidity. A phased rollout with an initial pilot program is anticipated within 12-18 months.
