The South Korean won took the position of most-used currency, topping the U.S. dollar, for trading crypto during the first quarter of 2024, according to research firm Kaiko. 

The cumulative won trade volume on centralized crypto exchanges during the period recorded $456 billion, while the U.S. dollar reported $445 billion, the data showed.

“In Q1 2024, the South Korean won surpassed the U.S. dollar in terms of cumulative trade volume,” Kaiko said in the data report.

South Korea hosts one of the world’s most active cryptocurrency markets. During the crypto bull run in March, the local crypto trade volume briefly topped that of the country’s stock market. 

Five fully licensed exchanges — Upbit, Bithumb, Coinone, Korbit and Gopax — dominate the local market, where front-runner Upbit takes up over 80% of the market share on most days, according to Kaiko. Runner-up Bithumb sought new users by hosting zero-trading fee campaigns in late 2023.

Major global exchanges Crypto.com and Binance have also set out to enter the booming South Korean market. Earlier this month, Crypto.com announced that it is launching its retail trading platform in the country on April 29. Binance, on the other hand, had already acquired a major stake in Gopax in 2023. However, local regulators have repeatedly delayed approving Gopax’s transfer of ownership to Binance, reportedly due to concerns surrounding its legal issues in the U.S. 

Meanwhile, South Korea’s general election on April 10 saw a major win for the country’s opposition Democratic Party, which took 175 seats out of 300 in the national legislature. The Democratic Party has made several election promises pertaining to boosting the local crypto sector, including the approval of local spot crypto exchange-traded funds.

Strengthening regulation

The government is also putting effort into setting a regulatory framework for local investors. In July 2023, South Korea enacted the Virtual Asset User Protection Act, its first law focused on crypto, which is expected to go into effect this July.

The legislation aims to eradicate illicit market acts, such as using undisclosed information for crypto investments, manipulating market prices and engaging in fraudulent transactions. It also requires crypto service providers to safeguard over 80% of deposits in cold storage to protect user funds and enroll in insurance programs for potential user compensation in the event of security breaches.

South Korea is currently working to develop a second part of the user protection act, which is expected to focus on standardizing crypto token issuance and information disclosure for investors.