South Korean Won Surpasses US Dollar as Most Used Fiat for Crypto Trading
South Korean Won Surpasses US Dollar as Most Used Fiat for Crypto Trading
The South Korean Won has surpassed the US dollar as the most widely used currency for crypto trading in the first quarter of 2024, according to a report by Kaiko.
Cumulative trading volume in won amounted to US$456 billion, while the US dollar reached US$445 billion. The crypto landscape in South Korea is dominated by five licensed exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax.
Upbit Dominates South Korean Crypto Market Share
Upbit, historically the leader with an average market share of 82%, is followed by Bithumb and Korbit, which are trying to attract more consumers by offering fee-free trading campaigns.
Bithumb has experienced significant growth, with its market share tripling in just a few months after the launch of the fee-free policy. On the other hand, Korbit's market share has not increased significantly, averaging less than 1% in 2024.
Several factors have contributed to the increase in local crypto market share in South Korea. One of them is the victory of the Democratic Party in the country's legislative elections. The Democratic Party is known for promising support for the local crypto sector, including the approval of local spot crypto exchange-traded funds (ETFs).
South Korea is known to have passed the Virtual Asset Consumer Protection Act in July 2023, which is expected to be enforced by July 2024.
The law gives the government the authority to oversee whether virtual asset businesses comply with the Virtual Asset Consumer Protection Act and to inspect their business and status.
The law also requires crypto asset service providers to keep more than 80% of deposits in cold storage as a form of protection for user funds and to register in an insurance program for potential user compensation in case of security breaches.
Conclusion
the shift in dominance from the US dollar to the South Korean Won as the primary fiat currency for crypto trading reflects the evolving landscape of the global cryptocurrency market. With a cumulative trading volume exceeding that of the US dollar in the first quarter of 2024, the South Korean Won has emerged as a formidable force in the realm of digital asset trading.
This transition is underscored by the dominance of five licensed exchanges in South Korea, with Upbit leading the pack with a historic 82% market share. The efforts of platforms like Bithumb and Korbit to entice users through fee-free trading campaigns have further fueled market competition and innovation.
Bithumb's remarkable growth, tripling its market share in a matter of months, highlights the potential for rapid expansion within the South Korean crypto market. However, challenges persist, as evidenced by Korbit's struggle to significantly increase its market share, hovering at less than 1% in 2024.
Several key factors have contributed to the rise of the South Korean Won in crypto trading, including political developments such as the victory of the Democratic Party in legislative elections. The party's commitment to supporting the local crypto sector, including initiatives like the approval of local spot crypto ETFs, has bolstered confidence and investment within the market.
Furthermore, regulatory measures like the Virtual Asset Consumer Protection Act, set to be enforced by July 2024, aim to provide oversight and safeguards for users and businesses operating within the crypto space. Mandates such as the requirement for crypto service providers to store a significant portion of deposits in cold storage and participate in insurance programs demonstrate a commitment to enhancing security and consumer protection.
Overall, the ascendancy of the South Korean Won signals a broader trend towards the diversification and maturation of fiat currencies within the cryptocurrency ecosystem, underscoring the importance of regulatory frameworks and market dynamics in shaping the future of digital asset trading.
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This content aims to enrich reader information. Always conduct independent research and use disposable income before investing. All buying, selling, and crypto asset investment activities are the reader's responsibility.
