Korea's Crypto Holdings Soar as Tax Looms

South Korea has become the second-largest holder of cryptocurrency assets on blockchain networks, behind only the United States. This is according to Chainalysis' recent Global Crypto Adoption Index, which ranked South Korea fifth globally in terms of crypto adoption among 117 countries surveyed.

The country's growing presence in both investment and usage is evident from its sixth-place ranking in stablecoin payments received worldwide. In fact, a significant portion of these transactions, 51.2%, originated in the Asia-Pacific region, with South Korea being one of the top destinations for stablecoin payments.

However, market participants are warning that if taxation begins next year as scheduled, domestic funds could shift en masse to overseas exchanges and personal wallets due to inadequate tax infrastructure. In a survey conducted by Tiger Research, 73.1% of crypto investors said they would likely reduce their use of domestic exchanges once the tax takes effect.

The government maintains that the tax will proceed as planned in January, but lawmakers have introduced bills to delay its implementation by two or three years.