South Korea's Stablecoin Outflow Streak Hits 18 Months

South Korea has experienced its 18th consecutive month of net stablecoin outflows, with $367 million transferred to overseas exchanges in June. This trend, which began 18 months ago, shows no signs of slowing down despite changing market conditions.

The country's largest domestic platforms sent $1.81 billion abroad while receiving $1.44 billion from foreign venues during the same period. The imbalance has become a structural challenge for regulators, exchanges, lawmakers, and investors nationwide.

Market participants attribute these transfers to South Korean demand for products restricted or unavailable on local exchanges, including overseas derivatives, tokenized real-world assets, decentralized finance, and staking services. Stablecoins are functioning as a bridge between the tightly controlled domestic market and a broader offshore menu of financial products.

The regulatory response has been slow to address this issue, with policymakers working towards the Digital Asset Basic Act, which aims to establish South Korea's first comprehensive framework for stablecoin issuance, disclosures, and market conduct. However, progress remains delayed due to disagreements among lawmakers over which institutions should be allowed to issue won-pegged stablecoins.