The Block GCCI 2026 Country Profile: Inside Korea’s Crypto Market

Section 1: The Block’s Global Crypto Competitiveness Index

Crypto markets have historically been measured on their trading volume, ownership, or adoption. While these metrics remain important, they speak to demand-side factors rather than the environment in which crypto companies and capital can operate.

A country can have large trading volume while having a restrictive domestic market. Retail users may have access to markets while institutional businesses are limited. Similarly, a country with a small consumer market may create a clearer path to regulation, institutional capital, and relatively open access to international customers.

The Block’s Global Crypto Competitiveness Index attempts to capture a country's attractiveness as a place to build a crypto business, deploy institutional capital, and serve customers. It ranks jurisdictions across 17 factors covering trading volume and crypto ownership, access to talent and capital, regulation and licensing, and openness to cross-border business and investment.

The index aggregates the 17 factors across 4 categories: market context, industry, regulation, and cross-border openness. Each metric indicates how well businesses can establish and serve crypto customers in a given jurisdiction. As institutional adoption and traditional finance’s involvement increases, the key question of where to establish the company remains.

Market context focuses on demonstrated demand in the geography, including trading volume and crypto ownership. This captures whether there is a meaningful customer base and active liquidity. A market with active users is a potential customer base for a company considering where to set up.

Industry, on the other hand, looks at other established businesses in the locale. Factors such as developer density, venture capital allocation, and existing products and services inform this category. A jurisdiction with customers but little infrastructure to support businesses is less competitive.

Regulation and access is the largest category. A large user base or strong commercial base is limited if new companies cannot obtain licenses, open the required bank account, or are limited in the products or services they can offer. Similarly, institutional capital requires regulated counterparties, custody, banking, and clear asset treatments to be effective.

Lastly, crypto operates without borders, so businesses' ability to operate internationally is key. Restrictions on cross-border payments or investments can impose higher costs on crypto businesses than on those that primarily operate domestically.

Section 1.1: Methodology

Unequal weighting across categories helps create a holistic scorecard. When considering equal weighting, a key consideration emerged. Under equal weighting, a country could compensate for significant regulatory or cross-border barriers simply by having unusually large trading volume. The index aims to assess whether a jurisdiction is attractive for building a business.

In previous cycles, a strong indicator for businesses was retail participation and volume. Crypto regulation was scarce, if not nonexistent, so businesses relied heavily on volume to support decision-making. As markets have evolved and become more institutionalized, trading demand alone becomes less of a differentiating factor. Businesses now increasingly look at licensing regimes, banking access, custody, permitted products, and international operations. However, customer demand is still a strong indicator of an attractive jurisdiction. High participation rates support economies of scale and can provide useful testing for new products and offerings.

By shifting weight from market context to regulation and access, the index is more sensitive to business and capital participation over pure trading activity. For many businesses, the current regulatory regime and outlook act as an enabling or constraining layer. The US is working toward federal regulation through the GENIUS Act, but overlapping SEC and CFTC oversight makes the landscape trickier. The EU’s MiCA unifies regulation across member countries, making it attractive to businesses that look to offer services across multiple countries. Licensing affects how quickly firms can set up and operate, banking affects how quickly customers can onboard, and custody requirements shape the supporting infrastructure required. In aggregate, the design places more weight on the conditions surrounding activity than on the activity itself.

Section 1.2: Global Rankings and Korea

The index reveals that countries can be competitive across different vectors. Winning in one category does not mean a jurisdiction is the strongest overall.

The United States, the United Arab Emirates, and Switzerland form a tight podium. Each country offers a blend of attractive features. The United States offers a strong market with deep liquidity and a large potential customer base. UAE has the strongest regulatory framework for establishing businesses and robust cross-border infrastructure but a weaker domestic industry. Similarly, Switzerland ranks second for industry, regulation, and cross-border, but has a weaker market context. Switzerland has built a crypto environment that lets companies scale beyond its relatively small local user base.

The same results are apparent in venture activity. Venture capital funding has moved from anonymity in previous cycles to more transparent deals with public-facing founders. As of September 2026, more than 40% of VC deals have come from one of the three podium countries. When examining the dollar values of these deals, the jurisdictional attractiveness becomes even clearer. Of the $10 billion raised this year, more than 67% has flowed into one of these three countries. The advantages for establishing crypto companies in these countries are clear. Large user bases, clear regulatory frameworks, and easy cross-border transactions make a jurisdiction an ideal locale to do business for crypto companies and investors looking to deploy capital.

Korea is nearly the inverse of Switzerland. While Korea ranks 12th overall, its performance across the index is sharply bifurcated. Korea outperforms its aggregate position in market demand, ranking 6th in market context, and scores strongly on specific factors such as product permissions and operating conditions. However, these commercial and operational strengths are outweighed by severe policy friction. Korea ranks 13th in Domestic Regulation and last in Cross-Border Openness due to strict foreign exchange restrictions, zero local primary token issuance, and stringent Travel Rule enforcement.

Section 2: A Retail Boom and the ICO Ban (2017-2018)

A Market Primed for Trading

The scale of Korean retail participation in 2017 reflected conditions that predated crypto. Korea entered 2017 with one of the world's highest rates of smartphone ownership and broadband penetration, a retail investor base already active in KOSDAQ small caps, and a two-decade familiarity with digital assets through online gaming economies. Marketplaces like ItemBay had facilitated real-money trading for in-game goods since 2001, conditioning millions of users to treat intangible digital items as liquid financial assets long before crypto existed. Additionally, the Foreign Exchange Transactions Act added friction to moving money abroad, which kept a lot of retail capital in domestic venues.

Demographic pressure added a further push. Youth unemployment was near 10% in 2017, Seoul apartment prices were rising faster than incomes, and a widely used vocabulary of "spoon classes" captured the sense that social mobility through earned income was no longer an option. In a December 2017 survey by Saramin, 31.3% of 941 office workers said they had invested in virtual currencies, with an average position of 5.56 million won (~$5,000), and 54.2% gave "the fastest way to make money" as their reason.

Korean market structure made that demand easy to act on. In most countries in 2017, buying an altcoin took several steps: a user bought bitcoin on a fiat exchange, transferred it to a crypto-only exchange, and traded it there, since most altcoins were priced only in BTC. Korean exchanges listed altcoins directly against the won, so users could skip those steps. Won deposits also cleared in minutes, while bank transfers to exchanges in the US and Europe often took days. With fewer barriers, Korean retail money flowed into crypto faster than anywhere else, and more of it went straight into altcoins. By May 2017, Korea was the world's largest ether market, with about $335 million in daily volume and a 38% global share. The ETH/KRW pair was trading more than ETH/BTC, which was then ether's main global market. By December, won-denominated trading made up about 21% of global crypto volume, and an estimated 2.5 million Koreans held virtual currencies. On some days, Bithumb's trading volume exceeded that of KOSDAQ, Korea's tech-focused growth market, and the exchange's 2017 revenue rose 171-fold from the year before.

Korea’s ICO Ban

The government that confronted this market in 2017 was new and had come in on a promise to protect ordinary households from speculation. The Moon administration took office in May, and by August it had already announced a sweeping package of measures against real estate speculation in Seoul. Crypto presented the same problem in a more acute form. The people pouring money in were disproportionately young and salaried, the same constituency the administration had promised to protect, and the asset they were buying sat outside every framework the state used to supervise financial markets. Exchanges operated without a license, prices were set on order books nobody regulated, and the anonymity of the assets made them a natural channel for money laundering and for moving capital out of the country in breach of exchange controls. Multi-level marketing schemes selling fictitious coins had multiplied through the year, and the regulator cited a rise in ICO-related fraud as a direct trigger for its action. From the government's point of view, a fast-growing, unsupervised, retail-dominated market with rising fraud and no legal basis was a problem to be contained before it produced losses on a scale that would trigger public backlash.

Token sales were the part of the market where containment looked most achievable. Globally, ICOs raised roughly $2 billion in the first nine months of 2017, with Korean retail investors driving significant demand. Domestic projects were also starting to issue tokens, led by ICON’s September sale that raised 150,000 ETH, with a queue of local teams preparing to follow. On 28–29 September the Financial Services Commission (FSC) announced that all forms of token issuance would be prohibited. Vice chairman Kim Yong-beom said money was flowing in an unproductive and speculative direction, and the announcement characterized token sales as a violation of the Capital Markets Act, with stern penalties promised for anyone involved in issuing.

The ban applied to the issuing entity, not to founders or buyers. Korean teams responded by incorporating foundations abroad, mostly in Singapore and Switzerland, while continuing to operate from Seoul. An Financial Supervisory Service (FSS) survey of 22 companies found several had set up overseas entities specifically to avoid the ban.

Source: Tracxn; court filings; Finnews Asia; ICON Foundation.

The government also weighed closing exchanges. On 11 January 2018, Justice Minister Park Sang-ki said a bill to ban domestic trading was being prepared. Bitcoin fell more than 10% on Korean exchanges that day. Within hours, the Blue House said nothing had been decided, and within a week a petition against the ban had passed 200,000 signatures. The government introduced real-name trading accounts on 30 January and confirmed on 14 February that exchanges would be regulated, not closed.

Upbit Launches

Upbit launched into this market on 24 October 2017. Its operator was Dunamu, which already ran Kakao Stock, Kakao's social trading app. By bringing Kakao Stock's familiar, polished user experience to crypto trading, Upbit gave users an intuitive interface they already trusted. Dunamu had signed an exclusive partnership with Bittrex, which supplied Upbit's BTC, ETH and USDT markets. That gave Upbit something no domestic rival had. It opened with more than 100 altcoins, the most of any Korean exchange at the time. Korean retail investors were heavily focused on altcoins, and Upbit enabled them to trade Bittrex's full catalog directly in Korean won without the friction and delays of offshore exchanges.

Distribution was the second advantage. KakaoTalk was installed on more than 90% of Korean smartphones, and Upbit users could log in with Kakao apps, including KakaoTalk and Kakao Pay. A new exchange could therefore reach almost every Korean retail investor from launch day. Upbit also led on security, months after Bithumb's breach. It adopted BitGo's dual wallets and consulted Theori, a security firm founded by members of PPP, a multiple-time DEF CON CTF champion team. Its clean interface and exclusive altcoin range drew users quickly.

Growth was immediate. About two months after launch, Upbit was the world's largest exchange by 24-hour trading volume. It still held the top spot in January 2018, processing $7.57 billion in a single day, ahead of Binance in second and Bithumb in third. By February 2018, when the government confirmed exchanges would be regulated rather than closed, Upbit had firmly established itself as the dominant exchange in Korea.

Section 3: Banks as Gatekeepers (2019-2021)

The February 2018 decision to regulate exchanges rather than shut them down left open the question of how to approach it. Korea settled on having commercial banks control access to the market. Over the next three years the state wrote that arrangement into law, the banks decided who they would let through, and Upbit enjoyed a structural market advantage.

Korea’s Real-Name System

The real-name rule of January 2018 was FSC guidance to banks, not a law. An exchange could accept won only if it held a contract with a commercial bank, and each customer could deposit only from an account at that bank, opened in their own name and verified against a national ID. The bank did the identity check and carried the money-laundering liability, which resulted in most banks being very selective with who they partnered with. Bithumb, Coinone and Korbit kept the contracts they already had with NH Nonghyup and Shinhan. Upbit's bank, IBK, kept verifying existing customers but would not issue accounts to new ones, so the exchange that had just become the largest in the world could not open a won account for a new user, and stayed that way for two and a half years. Two other groups were shut out entirely including foreign nationals since they couldn’t open an account at a Korean bank and companies that couldn’t get a bank to partner with.

From 25 March 2021 every exchange had to register with the Financial Intelligence Unit, and to offer won trading it needed information-security certification from the Korea Internet and Security Agency (ISMS) and a real-name bank contract. Existing operators were given a six-month grace period, until 24 September 2021.

Upbit & K Bank

Upbit found its bank in June 2020, and it found one that needed the deal as much as it did. K Bank, the country's first internet-only lender, had suspended new lending for fifteen months over capital shortfalls. A contract with the largest exchange gave people a reason to open accounts, and it gave Upbit a fully digital onboarding path months before the bull market began. Between June 2020 and July 2021 Upbit added 4.2 million users to Bithumb's 820,000. By March 2021 daily crypto volume on Korea's four won exchanges exceeded the KOSPI and KOSDAQ combined, and by August Upbit held about 80% of it, with KRW 5.3 trillion in customer deposits against Bithumb's 1.03 trillion. Dunamu earned more operating profit in the first quarter of 2021 than in the whole of 2020, six times over, and a September share sale valued it at KRW 10 trillion.

Upbit benefitted tremendously from this partnership. Headed into the bull market in 2021, Upbit’s market share rose from 37% to a dominant 70%, where it still roughly sits today. The partnership allowed K Bank to provide Upbit with reliable access to real name verified banking services and allowing customers to seamlessly move money. This strong performance shows how powerful a supportive ecosystem is when building crypto businesses. K Bank’s access to traditional financial infrastructure emerged as a critical competitive advantage.

Section 4: Terra and the Shift to Investor Protection (2022-2024)

Terra Turns Regulation into Priority

The regulatory framework of the 2021 era was designed to control market access. Regulation focused on Virtual Asset Service Provider (VASP) oversight and Korea was among the first countries to introduce legislation around VASPs. These early sets of regulations focused on AML, KYC/KYB, and registration with the Korea Financial Intelligence Unit (KoFIU). However, the regulations did not provide a framework for what happened once investors were onboarded onchain. The Terra-Luna collapse in 2022 shifted priorities for policymakers overnight.

Terra had a particularly profound effect on Korea. Korean native Do Kwon founded and operated the project onshore, though its token-issuing entities were incorporated offshore, making it an example of the structure that developed after Korea restricted domestic token issuance in 2017. When UST lost its peg and Luna collapsed, it made policy considerations clear and urgent: Koreans stood to lose even though asset issuance itself fell outside the country’s jurisdiction.

In May 2022, less than two weeks after the collapse, the Korean Financial Services Commission met with government agencies to enact consumer protections and protect against financial stability risks posed by the rapid growth of crypto and DeFi.

As a result, new regulation slowed the pace of new token launches on Korean exchanges. A Financial Services Commission report cited a 72% reduction in new crypto listings, and the share of trading concentrated in the ten largest global crypto assets increased from 46% to 57%.

Shifting Regulation from Access to Conduct

The Virtual Asset User Protection Act was passed in June 2023 in response to limitations in previous frameworks. The new regulations set out three key guardrails that continued to lay the foundation for consumer protection and business practices.

First, the mandate established safeguards for customer assets. Exchanges were required to deposit customers' won with banks, keep customer crypto separate from company assets, store at least 80% of customer crypto in cold wallets, and carry insurance or reserves against hacks and outages. Second, the act borrowed language from market conduct rules for the stock market. It banned the use of material non-public information, price manipulation, and fraudulent trading. Lastly, the FSC was given supervisory authority for VASPs to investigate misconduct and unfair trading practices.

While the measures worked to improve investor protection, Korea became more a more expensive jurisdiction to operate in for crypto businesses. The mandatory custody agrancements, insurance requires and monitoring raised the compliance costs. For smaller operations, these costs raised the bar to enter the market. Similarly, established exchanges also faced pressure to scrutizie existing token offerings, assess project risks, and monitor activity.

These new guidelines positioned Korea among the world’s most advanced markets at the time but also reinforced the barriere to entry. The act provided protections and market discipline that the previous AML framework lacked by asking more from businesses. Korea's position now sets up for yet another shift in the policy discussion, this time focused on how Korea can compete in a global market that has become increasingly institutionalized.

Section 5: From Containment Toward Competitiveness (2025-2026)

Korea has had a long history with crypto regulation; in many aspects, it was a leader. From early crypto adoption among the public to swift policy changes after Terra-Luna, Korea has spent much of the past decade building controls for an industry that has grown faster than the framework can keep up with. Today, the regulatory conversation has moved to how corporations and institutions can participate in the crypto economy. Licensing pathways are being created for activities that were previously blocked or pushed offshore entirely. Policymakers are looking to expand the allowlist of activities while maintaining strong control and oversight. The key areas include market access, institutional custody, and tokenized securities, while stablecoins and cross-border payments are still being discussed. The questions being answered will help Korea combine its powerful retail customer base with corporations better suited to meet that demand.

Corporate Access

A key limitation of corporate access to crypto under the previous regulatory regime was real-name accounts, which banks generally would not issue to corporations. The passage of the Virtual Asset User Protection Act allowed the creation of a pilot that let 3,500 companies and investment corporations register as qualified investors, making them eligible for real-name accounts for investment purposes. Despite being a pilot, the market is opening up to corporate participation, which is the type of change that expands a country's potential for crypto adoption.

Another sign of Korea’s maturing corporate ecosystem is the growth of custody platforms in the country. In the summer of 2026, BitGo Korea became the first global entity to register as a VASP. This allows it to provide custody services to Korean companies and institutions. BitGo serves as a prime example of how international companies are first limited by regulation. With the licensing pathway clear, companies will seek out markets with strong existing domestic development. Changes in user-protection laws made crypto more politically feasible, enabling developments on the corporate-access front.

2025 Election

Korea’s 2025 presidential election put crypto in the spotlight as Lee Jae-myung pledged support for spot crypto ETFs and supported the development of won-denominated stablecoins. This marked a shift from the 2022 election cycle, when crypto pledges centered around investor protection and taxes. The tone in 2025 shifted to treating digital assets as an industry development topic and to best practices for integrating with Korea’s existing financial system. These initiatives help to set the framework for other institutional participation. The focus is on opening access and providing the infrastructure and ecosystem to enable it.

Won-Stablecoins & Tokenization

One of the key crypto debates remains won-denominated stablecoins. Like other governments worldwide, Korea is debating the competitive pressures the Won could face if the world adopts and relies more on dollar-backed stablecoins rather than local currency. Lee made the creation of a won stablecoin market a key campaign commitment. Korea's banking industry is advocating a tighter, banking-led rollout of Won stablecoins, with banks retaining the role of issuers and overseers and holding at least 51% of any Won stablecoin issuer. While this gives more control and confidence over reserves, redemptions, and stability, it limits participation by non-banking and crypto-native firms. A broader-access stablecoin regime will likely promote stronger competition and innovation in Korea. As this topic continues to be debated, the outcome will affect far more than payments. Stablecoins could eventually become settlement instruments for onchain products including tokenized securities. Tokenized equities are an area where Korea has already moved towards implementation. With phased rollouts starting in February of next year, Korea is rapidly tokenizing assets onchain, with its initial phases focused on private placed assets. While the nominal amount of assets tokenized is low, the regulatory framework is becoming more comfortable with experimentation, and it’s building the infrastructure to connect existing capital markets to onchain assets.

Conclusion

Korea has never lacked crypto demand. The domestic market is strong and can produce world-leading volumes, even while remaining relatively contained. Recent policy shifts have made strides toward unlocking the frontier by adding institutional rails and supportive infrastructure. The country’s early access-based regulation has allowed real liquidity to generate domestic volume. Upbit supported these early efforts and still holds the largest market share in the country. The consequential collapse of Terra Luna reignited efforts by the country’s regulators and government to expand the scope of regulation to cover investor protection and market conduct. Looking ahead, Korea is moving toward clearer corporate crypto rules and regulations, while other areas, such as cross-border payments and stablecoins, continue to be debated. Three developing catalysts dominate headlines:

• Naver announced in November 2025 that it would be acquiring Upbit in an all-stock deal. Pending regulatory approval, this would form one of Korea’s largest tech conglomerates.
• In Janurary of 2026, the Korean FSC stated that it will allow spot bitcoin ETFs, with launch targeted for later this year.
• The second phase of the Digital Asset Basic Act covering stablecoin issuance and wider corporate access is still being debated.

These key developments determine whether Korea can translate its strong domestic market into a broader crypto ecosystem of investors, issuers, financial institutions, and service providers. If Korea aligns its regulatory framework with the standards of the US, UAE, and Switzerland, it could attract significant business and capital inflows. The GCCI captures attractiveness at a point in time. Korea’s legislative mandate is laying foundations that should accelerate adoption once broader access is enabled.

Crypto businesses and institutional capital are increasingly selective, and regulatory frameworks are becoming more important as the industry becomes more institutionalized. The GCCI captures this attractiveness across industry, market, regulation, and cross-border openness to rank countries as corporations look for where to domicile. Competitiveness goes beyond volume, focusing on how companies can build, operate, and deploy capital domestically and internationally.