The Asian cryptocurrency market is witnessing a significant shift as South Korean crypto exchange Upbit has secured a position among the top five global exchanges. Recent reports indicate that the Korean Won has overtaken the USD as the most-used fiat currency for trading BTC and other digital assets.
Key Takeaways
- Upbit now ranks among the top five global crypto exchanges.
- The Korean Won has become the most-used fiat currency for crypto trading.
- Upbit dominates 80% of South Korea’s crypto trading volumes.
- New regulations in South Korea could further strengthen 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 giants like Coinbase. Meanwhile, Binance appears to be losing market share in Asia.
Interestingly, Upbit’s rise comes amid 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 criticism from a South Korean legislator.
New legislation aimed at protecting investors after the collapse of TerraUSD, founded by South Korean entrepreneur Do Kwon in 2022, could inadvertently strengthen Upbit’s dominant market 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.
South Korea’s Crypto Enthusiasm
Despite the $40 billion collapse of the TerraUSD stablecoin, South Korean traders continue to show high participation in the crypto space, demonstrating their appetite for high-risk, high-reward investments.
Official data reveals 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. This widespread interest has turned into 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, according to data from CryptoQuant. Ho Chan Chung, head of marketing at Korean analytics firm CryptoQuant, stated:
"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."
Regulatory Challenges and Future Prospects
The introduction of new regulations in South Korea poses both challenges and opportunities for Upbit. The updated framework mandates crypto exchanges to enhance their reserves, secure investor protection insurance, and increase surveillance of suspicious transactions. These measures aim to protect investors but could also solidify Upbit’s dominant position in the market.
Earlier this week, Singapore-based Crypto.com decided to postpone its plans to launch in South Korea, citing the need for more time to consult with regulators. This decision highlights the complexities and challenges of navigating South Korea’s evolving regulatory landscape.
In conclusion, Upbit’s rise to the top five global crypto exchanges marks a significant milestone in the Asian cryptocurrency market. Despite regulatory challenges, South Korean traders remain highly active, and Upbit’s dominance in the region continues to grow.
