Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Why 2026 could mark crypto's next expansion phase in Korea
Prices of cryptocurrencies are displayed on a screen at Upbit, Korea's largest crypto-exchange, March 4. Yonhap
By Lee Yeon-woo
Cryptocurrencies continue inevitable march toward mainstream
Cryptocurrency entered 2025 with a euphoric rally. Clearer regulatory signals from major economies and a more accommodative policy backdrop helped propel Bitcoin to a record $126,000. Institutional capital flowed steadily into the market, with some companies adding digital assets to their balance sheets under strategic allocations.
Sentiment reversed sharply toward year-end. Concerns over U.S. trade policy sparked capital outflows, while expected Federal Reserve rate cuts were slower to materialize than markets had anticipated. The selloff intensified after October, when a renewed U.S. tariff pledge on China triggered about $19 billion in forced liquidations.
"Sixteen years after the genesis block, crypto's secular growth continues, sometimes painfully and occasionally awkwardly — but growing all the same," Presto Research wrote in its Dec. 18 report. "Welcome to crypto's teenage phase."
2025 proved to be a mixed year, but market watchers largely agree on one point: the industry is moving steadily toward a more polished, mainstream future.
"When I look back on 2025, what stands out is not volatility but alignment. The industry moved past the noise and returned to fundamentals," Korean blockchain investment firm Hashed wrote in its Nov. 18 report. "Narratives rose and faded quickly, yet the same question kept resurfacing: what is actually working?"
Korea reflects that broader shift. Once dubbed an "El Dorado of liquidity" during periods of intense retail speculation, the country's crypto market is gradually moving away from a retail-driven, centralized exchange-centric model. Instead, institutional participation and global macroeconomic conditions are expected to play a larger role, according to Dessislava Aubert, a senior research analyst at Kaiko.
"For now, progress is slowed by ongoing regulatory debates, particularly around stablecoin issuance, and large strategic initiatives, including Dunamu/Naver, remain subject to approval," Aubert said. "Overall, once regulatory uncertainty eases, Korea is likely to catch up quickly, building on its strong crypto engagement."
The following are several trends expected to shape the Korean crypto market in 2026.
Regulatory momentum continues to build
Major economies, including Korea, are expected to maintain a relatively favorable regulatory stance toward digital assets. The ruling Democratic Party of Korea (DPK) is pushing ahead with a second phase of crypto legislation targeted for passage in 2026, covering stablecoins and tokenized securities.
Regulators are also taking cautious steps toward expanding market access. Authorities are expected to allow general corporations to open crypto trading accounts and have been reviewing the potential introduction of spot Bitcoin exchange-traded funds (ETFs) since May.
"2026 will be a critical year for enabling broader corporate participation," Kim Jae-jin, vice chairman of the Digital Asset Exchange Alliance, said at a Dec. 3 seminar hosted by the DPK.
Members of the ruling Democratic Party of Korea's digital asset task force team meet with advisers at the National Assembly in Seoul, Monday. Yonhap
Institutional maturity tempers speculative edge
While retail activity is expected to remain a defining feature of Korea's crypto market, the extreme price swings that once characterized trading are likely to moderate as institutional participation grows.
As of Nov. 12, U.S. spot Bitcoin ETFs held about 1.69 million tokens, roughly 7 percent of the total supply. Companies holding cryptocurrencies directly on their balance sheets owned an additional 928,305 Bitcoin, or 4.7 percent of supply, according to Korbit Research. Combined, about 11.7 percent of all Bitcoin is now held in long-term institutional vehicles, a dynamic expected to dampen volatility.
"The size and complexity of the crypto market have reached a critical threshold where price movements are no longer driven solely by a single narrative of speculation," said Chris Kim, CEO and co-founder of Axis.
Accelerated growth of stablecoins and tokenization
Regulatory clarity in 2025 accelerated institutional activity around stablecoins. Once dismissed as peripheral, they are increasingly viewed as a bridge between blockchain-based systems and traditional finance, with growing relevance to payments and monetary policy.
Numerous Korean companies and financial institutions announced plans in 2025 to enter the stablecoin business pending legislation. While disputes remain — particularly over the central bank's push for banks to hold a controlling stake in issuance consortia — the sector is expected to expand in 2026 regardless of the final framework.
"If the dollar can expand globally through stablecoins, why couldn't Korea do the same?" KakaoPay CEO Shin Won-geun said at a seminar on Tuesday.
Tokenization of real-world assets is also gaining traction. Boston Consulting Group estimates that Korea's fractional investment and security token offering market could reach 367 trillion won ($250.8 billion) by 2030. Financial authorities are set to approve the creation of an over-the-counter market for such tokens earlier in 2026.
"Progressive regulatory changes in markets like Korea and Japan, combined with highly digital-first populations, are turning the region into a proving ground for scalable, on-chain activity," said Avery Ching, CEO and co-founder of Aptos Labs.