South Korea became East Asia’s largest cryptocurrency economy by transaction volume. The country’s market grew 12.3% over the year, with retail investors and artificial intelligence (AI) cryptocurrencies among the main drivers of activity.
Between July 2025 and June 2026, South Korea’s cryptocurrency market reached $449.1 billion, according to a Chainalysis report. Total inflows to South Korean cryptocurrency platforms increased by $51.1 billion.
South Korea was well ahead of other major markets in the region by cryptocurrency economy size, including:
Japan, at $228.3 billion;
Hong Kong, at $192.2 billion;
China, at $176.3 billion;
Taiwan, at $140.4 billion.
South Korea’s growth came without large-scale participation from traditional financial institutions. In February 2025, South Korean authorities unveiled a plan to gradually lift restrictions on corporate cryptocurrency transactions. However, banks and securities firms remained largely in the preparatory stage, setting up specialized units and running pilot projects involving stablecoins, tokenization, and digital asset custody.
One notable feature of the South Korean market was demand for cryptocurrencies linked to artificial intelligence. By June 2026, the category ranked first among thematic groups by trading volume in Korean won, with a share of about 18%. By comparison, other categories accounted for:
payment tokens, 15%;
tokens of smart contract blockchain platforms, 12%;
cryptocurrencies used primarily as a store of value, 11%;
stablecoins, 9%;
memecoins, 4%.
Trading in AI cryptocurrencies was particularly intense in South Korea. Their share of won-denominated transactions was 19.5 times the corresponding share of yen-denominated trading in Japan. In Japan, AI cryptocurrencies accounted for just 0.91% of trading in June 2026.
South Korea’s performance also reflected a government initiative. In 2026, the government formally included the development of blockchain technology and the digital asset market in its economic growth strategy.
East Asian markets differed significantly in structure:
- retail investors dominated in South Korea;
- banks and other financial institutions played a growing role in Japan;
- Hong Kong stood out for its high level of institutional activity;
- direct user-to-user transfers played a significant role in China.
Overall, East Asia’s cryptocurrency markets followed different development models. In Japan, the crypto economy reached around $228 billion, with decentralized exchanges accounting for about 34.5% of the cryptocurrency services market. About 1 in 4 users who withdrew assets from exchanges operating in the country subsequently moved funds into DeFi protocols. Activity on decentralized platforms rose more than 200% since 2022, while activity on centralized exchanges remained largely unchanged.
Hong Kong, meanwhile, solidified its position as an institutional hub. Institutional platforms accounted for 16% of inflows to local cryptocurrency services, nearly 3 times the share of any other major market in the region. During the reporting period, Hong Kong received nearly $24 billion in transfers between cryptocurrency services, about 6 times the amount recorded in Japan and 44 times that of South Korea. Cumulative net inflows through corporate channels reached $17.4 billion by mid-2026.
Chainalysis analysts identified a different trend in China, where official restrictions on cryptocurrency services remained in place. The company estimated the Chinese cryptocurrency market at a minimum of $176 billion during the reporting period, though it said the actual figure could be higher. Domestic direct cryptocurrency transfers between users accounted for 59.1%, with their share increasing 3.5 times over the year.
Stablecoin payments expanded particularly quickly in China. During the reporting period, users transferred $104.1 billion in stablecoins across 18.1 million transactions. Stablecoin velocity reached 33.2 turns per year, compared with a global average of 9.3. By comparison, the figure was 9.9 turns in Japan, 6.1 in Hong Kong, 5.1 in South Korea, and 3.5 in Taiwan. Chainalysis also noted that the number of unique wallets sending direct stablecoin transfers in China increased 43 times from the first quarter of 2024 through the second quarter of 2026.
Despite the ban on cryptocurrency use, government agencies in mainland China actively implemented blockchain solutions for interactions between tax authorities and banks. The effort was intended to expand small businesses’ access to financing while improving data security and transaction transparency. At the same time, Hong Kong and Shanghai, China’s largest financial centers, joined forces to develop and implement blockchain solutions aimed at digitizing cross-border trade and trade finance.
