The economic crisis is pushing Korean traders towards stablecoins

The current situation in Korea demonstrates how geopolitical and economic factors influence the choice of financial instruments. Against the backdrop of pressure on the national currency and slowing economic growth, local investors are increasingly turning to stablecoins as a means of preserving value.

Won devaluation and demand for stablecoins

According to data from the analytical platform NS3.AI, the trading volume of stablecoins in Korea has increased by 62% — a significant jump reflecting a change in investor preferences. The Korean won has reached multi-year lows against the US dollar, prompting traders to seek alternative ways to hedge against volatility.

This phenomenon is no coincidence. As the national currency weakens, dollar-denominated stablecoins become more attractive, providing stability amid exchange rate instability. Simultaneously, major cryptocurrency platforms have launched special promotions to attract volumes into stablecoins, aiming to capitalize on the growing interest.

Political and regulatory shifts in Korea

In addition to currency pressure, government decisions influence market dynamics. Recent changes in Korea’s regulatory landscape, including allowing corporate investments in crypto assets, signal potential liberalization. Such steps could lead to an expansion of the local crypto market capitalization.

However, the economic downturn affecting Korea creates a conflicting dynamic. On one hand, opportunities are emerging for institutional participants. On the other hand, retail investors seek to protect their savings during volatile periods.

What this means for the crypto market

The growth of stablecoin trading in Korea reflects a broader trend: when national currencies weaken and the economic situation is unstable, cryptocurrency markets become an alternative. Along with the liberal policies of regulators, this could mark a new stage in the country’s crypto market development.