Stablecoins accounted for nearly half of South Korea’s cryptocurrency outflows in the first quarter of 2025, signaling a significant shift in how local investors are moving assets abroad. According to recent data released by the Korean Financial Services Service (FSS), stablecoins represented approximately 47.3% of the country’s $40.6 billion in crypto outflows during Q1.
The findings highlight an increase in capital movement involving dollar-pegged digital currencies such as Tether (USDT) and USD Coin (USDC). These stablecoins are frequently used for trading on offshore exchanges, cross-border transactions, and payments on cryptocurrency wagering platforms for online gambling, allowing casino lovers to enjoy quick and easy access to their favorite casino games. Stablecoins are widely used on these platforms and many others since they are a less volatile alternative to Bitcoin or Ethereum.
Nearly Half of $40.6 Billion in Outflows Were Stablecoins
The revelation came during a National Assembly briefing, where Democratic Party lawmaker Min Byung-duk disclosed the figures, citing data from the Financial Supervisory Service (FSS). Of the 56.8 trillion won ($40.6 billion) in crypto assets that flowed out of South Korea in Q1, nearly $20 billion was linked to stablecoins. Min emphasized that this trend raises concerns over capital flight and the growing reliance on digital currencies for cross-border activity.
The data show that stablecoins were used primarily in transactions routed through overseas cryptocurrency exchanges, bypassing local platforms that are subject to stricter compliance requirements. This could be part of a broader strategy by South Korean investors to avoid regulatory bottlenecks and take advantage of lower trading fees or arbitrage opportunities abroad.
Regulatory Attention Intensifies
The sharp rise in stablecoin usage comes amid growing regulatory scrutiny in South Korea. In early 2025, authorities announced a plan to ease restrictions on crypto firms, allowing licensed entities to operate with clearer legal guidelines. At the same time, South Korea’s Financial Services Commission (FSC) is tightening rules around token listings and foreign exchange reporting, attempting to strike a balance between innovation and financial security.
Officials view the dominance of stablecoins in capital outflows as a concern, as it may indicate capital flight and circumvent existing financial controls. This trend is prompting the FSC to consider tightening reporting standards and possibly introducing new licensing frameworks for firms handling stablecoins. While South Korea has stringent rules on foreign exchange and financial transparency, the pseudo-anonymous nature of crypto transactions presents challenges.
Implications for Global and Local Markets
The recent data indicates South Korea’s crypto investors are becoming more sophisticated in their use of blockchain-based tools. With stablecoins taking a central role, both regulators and market participants are watching closely to determine how this trend could affect compliance, taxation, and international financial transparency, considering varying approaches taken by different countries.
Stablecoins such as USDT, USDC, and DAI are a type of cryptocurrency that aim to maintain a stable value by being pegged to traditional assets such as the US dollar or euro. Unlike volatile cryptocurrencies like Bitcoin, their relative price stability makes them attractive for traders, remittances, and international transactions.
Stablecoins’ role in crypto trading, particularly in Asia, has expanded rapidly. As South Korea emerges as a significant player in digital finance, how it navigates the stablecoin challenge may set a precedent for other jurisdictions facing similar concerns.
