South Korea leads East Asia in crypto market size with $449 billion economy

South Korea has claimed the top spot in East Asia's cryptocurrency market, according to a new report by blockchain analytics firm Chainalysis. The analysis, which examined on-chain flows from July 2025 to June 2026, estimated South Korea's crypto economy at $449.1 billion, or approximately 603.05 trillion won, marking a 12.3% increase from the previous year. Japan followed in second place with a market size of $228.3 billion, while Hong Kong, China, and Taiwan rounded out the top five.

In South Korea, the growth was largely driven by active trading from retail investors, particularly in AI-related tokens. These tokens dominated the won-denominated market, with Worldcoin trading volume reaching $7.41 billion alone. Notably, South Korea currently does not tax capital gains from crypto trading, but this is set to change in 2027 under existing legislation.

Japan's crypto market stood out for its significant use of decentralized exchanges (DEX), which accounted for 34.5% of cryptocurrency service inflows. Since 2022, DEX activity surged by over 200%, while centralized exchange activity remained stagnant. Store-of-value tokens like Bitcoin still dominated yen trading at 73.8%, but smart contract tokens such as Ethereum and Solana also gained traction, making up 15.4% of the market.

China's cryptocurrency economy was heavily influenced by peer-to-peer (P2P) trading, which constituted 59.1% of its market. The report suggested that China's social credit system, expanded into finance and the internet sector, may have contributed to the rise of unofficial financial channels. Chainalysis highlighted the distinct structures forming within East Asia's crypto market, with each country showing unique characteristics such as retail investment in South Korea, decentralized finance in Japan, institutional finance in Hong Kong, and P2P trading in China.