South Korea Dominates East Asia's Crypto Market with AI Token Boom

Chainalysis's latest report on East Asia's cryptocurrency adoption reveals a dynamic landscape with notable shifts across key markets. Between July 2025 and June 2026, the region saw a slight contraction in crypto activity due to the global bear market, but internal differences emerged. South Korea maintained its position as the largest retail trading hub, while Hong Kong solidified its role as a hub for institutional settlement. Japanese users increasingly turned to decentralized exchanges (DEXs) and perpetual contracts, and China saw sustained growth in peer-to-peer stablecoin usage.

South Korea's crypto economy reached $449.1 billion during this period, a 12.3% increase from the previous cycle, making it the largest in East Asia. Japan, Hong Kong, mainland China, and Taiwan followed with $228.3 billion, $192.2 billion, $176.3 billion, and $140.4 billion, respectively. The growth in South Korea was driven by increased activity on local trading platforms, which saw an additional $51.1 billion in flows.

AI-related tokens dominated South Korea's crypto market, surpassing traditional payment tokens like XRP ($1.49). Worldcoin (WLD, $0.56) led with $74.1 billion in trading volume, followed by SAHARA, VIRTUAL, BIO, and NEAR ($5.00). The report highlighted that AI token trading in South Korea was 19.5 times higher than in Japan, reflecting the country's strong retail investor interest in AI assets.

Despite the retail-driven boom, institutional participation in South Korea remains limited. Local banks and brokerages have formed digital asset teams and are exploring stablecoins, custody, and tokenization, but large-scale corporate investments have yet to materialize. The report suggests that upcoming regulatory changes, such as the planned 2027 implementation of crypto asset income tax and continued easing of corporate trading restrictions, could shift the market's current retail dominance.