South Korea’s stablecoin market is losing steam rapidly. The nation’s average daily trading volume of stablecoins, which exceeded 1 trillion won late last year, has dropped to the 200 billion won range as of June 2025 — shrinking to just one-fifth of its previous scale in half a year. Once seen as a “safe asset” within the volatile crypto market, stablecoins are now fading fast amid declining liquidity and weakening investor sentiment.
According to data released by lawmaker Park Sung-hoon of the National Assembly’s Finance Committee, citing the Financial Supervisory Service (FSS), the average daily stablecoin trading volume across the country’s five major exchanges — Upbit, Bithumb, Coinone, Korbit, and Gopax — stood at approximately 238 billion won in June. That marks a steep fall from 1.02 trillion won in December 2024. Monthly figures also reveal a steady slide: around 920 billion won in January, falling into the 300 billion won range by March, and further down to the 200 billion won range by mid-year.
Stablecoins — cryptocurrencies pegged 1:1 to fiat currencies like the U.S. dollar — have long functioned as a bridge asset in Korea’s crypto ecosystem, facilitating transitions between digital tokens and serving as a liquidity buffer. Yet the combination of a sluggish market, global uncertainty, and ongoing regulatory ambiguity has caused stablecoin trading to contract sharply.
The broader crypto market downturn has compounded the trend. The nation’s total average daily crypto trading volume dropped from over 17 trillion won in December to just 3.2 trillion won in June, while total holdings decreased from 121 trillion won to 89 trillion won over the same period. Many investors have shifted toward cash or adopted a wait-and-see stance, reflecting a widespread risk-off mood.
Analysts interpret the decline in stablecoin activity as a clear indicator of sentiment cooling across the market. Reduced transaction volume suggests not only a loss of speculative heat but also a waning need for “safe transitional assets” within the ecosystem. Some note that a growing share of trades has moved to decentralized exchanges (DEXs) or peer-to-peer platforms, escaping centralized reporting channels and official statistics.
However, experts warn that the prolonged contraction could eventually undermine market stability itself. Since stablecoins act as a core liquidity conduit — enabling transfers between exchanges and smoothing volatile price movements — their diminished presence could amplify market shocks during sudden upswings or sell-offs.
Calls for policy clarity are growing louder. Market participants are urging regulators to finalize Korea’s stablecoin issuance and reserve framework, including capital requirements and collateral standards, to restore investor confidence. Exchanges, meanwhile, are being encouraged to enhance liquidity, reduce transaction fees, and introduce new stablecoin-based products to attract participation.
“Stablecoins function as the bloodstream of the digital asset economy,” said one market analyst. “But right now, that flow is constricted. Without a coordinated effort among regulators, exchanges, and investors to rebuild trust, the market’s vital signs will continue to weaken.”
