South Korean Exchanges Shift Toward Stablecoins as FX Volatility Boosts Dollar Demand

South Korea’s crypto market is undergoing a notable shift as foreign exchange volatility in the won-dollar rate pushes investors toward U.S. dollar-pegged stablecoins. Industry officials report that demand for stable assets such as USDC and USDT has risen sharply, driven by the strengthening dollar and growing uncertainty in traditional currency markets.

Historically, Korean digital asset markets have often been left behind during rallies in equities or commodities. While benchmarks like the KOSPI, gold, and silver reached new highs, crypto assets frequently struggled to attract the same momentum, leaving domestic exchanges searching for ways to maintain trading activity. This time, however, stablecoins have emerged as a new catalyst.

The trend became clear when Korbit announced that it would waive all trading fees on transactions involving USD Coin (USDC). Beyond fee removal, Korbit launched an extended trading campaign running through March. Users who generate at least 10 million won in weekly cumulative volume become eligible to share in a reward pool worth 25,000 USDC. The exchange hopes this structure will encourage consistent stablecoin trading participation.

Coinone quickly followed with a similar approach, promising to distribute 8,000 USDC per week to users who meet specific volume thresholds. These aggressive campaigns highlight how stablecoins are evolving from simple settlement tools into major competitive instruments for exchanges seeking liquidity growth.

Meanwhile, the country’s largest platforms, Upbit and Bithumb, have taken a different route. Instead of focusing solely on incentives, they are expanding stablecoin access through new listings. Both exchanges recently listed Ethena USD (USDe), a synthetic stablecoin designed to maintain a one-to-one peg with the U.S. dollar without relying on traditional banking reserves. Upbit also introduced promotional rounds offering free Ethena tokens to top traders, reinforcing stablecoins as a central driver of engagement.

On-chain data supports this shift. CryptoQuant reported that when the won-dollar exchange rate crossed 1,480 won per dollar, trading volume in Tether surged to 378.2 billion won—representing a 62% jump compared with early January. This indicates that dollar-based stablecoins are increasingly being used as hedging tools as well as liquidity anchors.

At the same time, regulatory scrutiny is intensifying. South Korea recently proposed bringing stablecoins under the Foreign Exchange Transactions Act, aiming to close gaps that could enable money laundering, tax evasion, or unreported cross-border transfers. Lawmakers argue that stablecoins are becoming widely used payment instruments and must therefore be treated similarly to official financial tools.

Overall, South Korea’s stablecoin push reflects a broader market reality: as currency instability rises, exchanges are positioning dollar-pegged assets as the foundation for future trading growth, while regulators move to ensure tighter oversight.