Upbit Joins the Elite: Challenges Binance and Coinbase in Top Five Crypto Exchanges
The South Korean cryptocurrency exchange Upbit has surged into the ranks of the top five global crypto exchanges, challenging industry giants like Binance and Coinbase. This rise comes amid a resurgence in Asia’s cryptocurrency markets and significant regulatory changes in South Korea.
Key Takeaways
- Upbit now ranks among the top five global crypto exchanges.
- The Korean Won has become the most-used fiat currency for crypto transactions, surpassing the USD.
- Upbit dominates 80% of South Korea’s crypto trading volumes.
- New regulations in South Korea could further solidify Upbit’s market position.
- Despite regulatory challenges, South Korean traders remain highly active in the crypto market.
Upbit’s Meteoric Rise
Upbit offers a wide array of cryptocurrencies, making it a dominant player in South Korea’s crypto landscape. The exchange accounts for 80% of the total crypto trading volumes in the country, putting it in direct competition with global players like Coinbase. Meanwhile, Binance appears to be losing market share in Asia.
Interestingly, Upbit’s rise comes despite increasing regulatory measures in South Korea. Last year, Upbit’s clientele made up nearly a fifth of its primary banking partner’s overall deposits, drawing significant criticism from a South Korean legislator.
Regulatory Landscape
New legislation aimed at protecting investors, introduced after the collapse of TerraUSD in 2022, could inadvertently strengthen Upbit’s dominant position. The updated regulatory framework requires crypto exchanges to bolster reserves, secure investor protection insurance, and intensify surveillance of suspicious transactions. As a result, Upbit has decided to submit deposits and withdrawals exceeding $1 million.
Earlier this week, Singapore-based Crypto.com postponed its plans to launch in South Korea, citing the need for more time to consult with regulators.
South Korea’s Crypto Enthusiasm
Despite the $40 billion collapse of TerraUSD, South Korean traders continue to show high participation in the crypto space, driven by the potential for high-risk, high-reward investments. Official data indicates that over 6 million Koreans, more than 10% of the population, engaged in cryptocurrency trading on registered exchanges in the first half of last year.
The widespread interest in crypto has become a political issue in Seoul, with candidates in recent parliamentary elections pledging to postpone taxes on digital assets or ease constraints on investing in US Bitcoin ETFs.
Altcoins, smaller tokens beyond Bitcoin and Ethereum, account for 80% of the trading volume on Korean exchanges, compared to around 50% on global platforms. Ho Chan Chung, head of marketing at Korean analytics firm CryptoQuant, noted:
"I invested more in stocks before, but now I’m all in crypto. The Korean stock market has stagnated, and companies don’t operate for shareholders’ benefit."
Conclusion
Upbit’s ascent to the top five global crypto exchanges marks a significant milestone in the cryptocurrency landscape. With its dominant position in South Korea and the potential for further growth amid new regulations, Upbit is well-positioned to challenge industry giants like Binance and Coinbase.
