While crypto holdings halve, 'digital dollar' stablecoins surge sevenfold in South Korea

While the overall value of virtual assets held by South Korean investors has plummeted by nearly half in just over a year, holdings in dollar-pegged stablecoins have seen a dramatic increase.

Data analyzed by BitPlanet Research Lab shows that total virtual asset holdings decreased from 121.8 trillion won (approximately $88 billion) at the end of January 2025 to 60.6 trillion won ($44 billion) by the end of February 2026. During the same period, deposits in Korean Won within the five major domestic exchanges also fell from 10.7 trillion won to 7.8 trillion won.

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The preference for dollar assets can be seen as a connected trend rather than a factor completely separate from the exchange rate.

In stark contrast, holdings of dollar stablecoins, such as USD Coin (USDC) and Tether (USDT), across the top five exchanges surged from 88.5 billion won in July 2025 to 607.1 billion won by February 2026, marking a nearly sevenfold increase. This growth occurred even as the broader cryptocurrency market experienced a significant downturn.

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We do not think the demand for dollar stablecoins will decrease just because Won stablecoins are introduced.

Analysts suggest this divergence is driven by several factors, primarily the weakening Korean Won against the US dollar. This currency trend has fueled a greater preference for dollar-denominated assets, with stablecoins serving as a convenient vehicle for investors seeking to hedge against currency depreciation and pursue overseas investment opportunities. The research lab noted a correlation between the rise in the dollar-Won exchange rate and the increase in stablecoin holdings, indicating that as the Won weakens, demand for dollar-pegged assets grows.

The discussion also touches upon the potential introduction of Won-based stablecoins in South Korea. However, experts believe that even with domestic options, the demand for dollar stablecoins is unlikely to diminish significantly, as they cater to a different need: direct exposure to dollar value and international investment. Companies like Circle, the issuer of USDC, are actively exploring partnerships with South Korean financial firms for payment and settlement infrastructure, suggesting a growing integration of stablecoins into the broader financial landscape, though actual service launches are still under consideration.

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Even if Won stablecoins existed, it would have been difficult to replace the demand for direct exposure to the dollar's value or for hedging against exchange rates.