South Korea saw a significant outflow of stablecoins worth over $367 million to overseas exchanges for the 18th consecutive month. This trend highlights investor demand for products not available on d
In June, South Korean crypto exchanges experienced another monthly net stablecoin outflow of approximately 560.3 billion won ($367 million), marking the 18th consecutive month of such activity according to data from the Financial Supervisory Service (FSS).
The major players in this trend include Upbit, Bithumb, Coinone, Korbit, and Gopax, which together transferred 2.7 trillion won ($1.81 billion) offshore but only received 2.2 trillion won ($1.44 billion) from foreign exchanges.
Market participants attribute these outflows to the availability of restricted or unavailable products on overseas platforms such as international derivatives markets and tokenized real-world assets (RWAs). This trend reflects a broader issue in South Korea's crypto ecosystem, where domestic regulations limit access to certain financial instruments.
Lawmaker Lee Jong-wook has called for reassessment of investor protection and regulatory frameworks. He argues that the current system is insufficient given ongoing outflows, suggesting that the government needs to move swiftly to improve its oversight mechanisms.
The situation comes as South Korea seeks to establish a comprehensive legal framework for digital assets through the Digital Asset Basic Act. However, legislative progress has been slow due to disagreements over stablecoin issuance and other regulatory aspects.
South Korean regulators are also working on expanding reporting requirements under Travel Rule guidelines, aiming to address issues of regulatory arbitrage by unregistered overseas exchanges serving South Koreans.
These outflows highlight the challenges faced by countries in regulating cross-border crypto activities. As South Korea continues its efforts to balance investor protection with innovation, market participants and lawmakers will be watching closely for any changes that could impact stablecoin usage.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.