The South Korean crypto market is showing clear signs of declining liquidation , with stablecoin holdings on the country's five largest exchanges having decreased by approximately 55% since July 2025. Stablecoin balances have fallen from around $575 million to nearly $188 million by mid-March 2026, indicating a significantly faster outflow of Capital from USD- Peg assets compared to previous periods.
Capital outflows are believed to have accelerated after the sharp weakening of the won. Reuters reported that the South Korean won breached the 1,500 won/USD mark in March and continued to fall to 1,517.3 won/USD on March 23, its lowest level since 2009. In this context, Bradley Park, founder of DNTV Research, believes that the depreciation of the won has increased the incentive to exit USD-denominated assets, causing many traders to sell stablecoins, convert them to won, and reallocate them to domestic assets.
This trend coincides with a wave of retail money returning to South Korean stocks. The KOSPI index has risen 75% in 2025 and is up another 37% this year at the time of writing. Meanwhile, Reuters and the South Korean Ministry of Economy and Finance said the government has implemented measures to encourage Capital repatriation, including tax incentives for investors selling overseas shares, converting currency to won, and long-term reinvestment in domestic stocks through the Reshoring Investment Accounts (RIA) mechanism.
