Korean Stablecoin Outflows Reach $346 Million Amid Overseas Exchange Competition

The stablecoin market in South Korea has seen significant outflows in recent months, with investors transferring large amounts of stablecoins to overseas exchanges. According to data from the Financial Supervisory Service (FSS), a total of 2.76 trillion won worth of stablecoins were transferred from domestic crypto exchanges to overseas platforms in June, resulting in a net outflow of 560.3 billion won.

This represents a significant shift in investor behavior, with stablecoin outflows now making up 77.6 percent of Korean investors' net purchases of overseas stocks in June. Market watchers attribute this trend to the competitive edge of overseas exchanges, which offer cryptocurrency futures and high-leverage products banned in Korea.

The data also shows that Coinone, Bithumb, and Upbit account for most of Korea's stablecoin trading market, with Coinone recording the highest average daily stablecoin trading volume in June at 84.58 billion won, accounting for 34.8 percent of the market.

Concerns are rising over investor protection and foreign-exchange management as these capital flows occur outside the reach of domestic regulators. Rep. Lee Jong-wook of the main opposition People Power Party has called on the government to comprehensively examine its investor protection and supervisory frameworks again and move swiftly to improve regulations.