South Korea Leads East Asia in Crypto with $449.1 Billion

Chainalysis released a report on East Asia's crypto adoption on October 5. From July 2025 to June 2026, crypto activity in East Asia slightly contracted amid a global bear market, totaling approximately $1.2 trillion, but the internal dynamics have changed: South Korea remains the largest retail trading hub, Hong Kong handles institutional settlements, Japanese users are shifting to decentralized exchanges, and the use of stablecoins in mainland China continues to expand.

South Korea's crypto economy reached $449.1 billion during the same period, a 12.3% increase from the previous cycle, ranking first in East Asia and fifth in the agency's grassroots adoption index. Japan, Hong Kong, mainland China, and Taiwan followed with $228.3 billion, $192.2 billion, $176.3 billion, and $140.4 billion, respectively. The growth in South Korea primarily came from capital flows on trading platforms, with local platform ecosystems adding approximately $51.1 billion in new traffic, and domestic ecosystem-related activities growing by 16.3%.

Structural changes in South Korea are concentrated in AI tokens. By June 2026, AI-related crypto assets had become the largest thematic sector in KRW trading, surpassing payment tokens like XRP in popularity. During the observation period, Worldcoin's trading volume was $7.41 billion, with SAHARA, VIRTUAL, BIO, and NEAR at $3.2 billion, $2.7 billion, $2 billion, and $1.7 billion, respectively. The trading of AI tokens priced in KRW accounted for approximately 19.5 times that of the JPY market.

In Hong Kong's $192.2 billion market, institutional platform inflows grew by 87% year-on-year, accounting for 16% of service inflows, nearly three times that of other markets in the region. Net inflows from business-to-business transactions were recorded at $24 billion in the agency's blog. Non-business channels continued to see net outflows. In Japan's $228.3 billion market, decentralized exchanges accounted for 34.5% of service activities, the highest among markets with established centralized exchanges, with participation related to decentralized exchanges growing over 200% compared to 2022, and retail activities on decentralized exchanges expanding by 36%.

Changes in mainland China are occurring at the wallet level rather than through licensed exchanges. The number of stablecoin peer-to-peer wallets increased 43-fold, with the scale of senders also expanding, focusing on stablecoin transfers between personal wallets rather than trading thematic coins on public markets. South Korean institutions remain in the preparatory stage: banks and brokerages have generally formed digital asset teams to promote stablecoin, custody, and tokenization pilots, but direct market entry by enterprises has not yet scaled. The report states that if the crypto asset income tax is implemented as scheduled in 2027 and trading restrictions for enterprises continue to ease, the current retail-dominated landscape may be reassessed.

These are four funding paths within the same bear market, not a single risk appetite rebound. South Korea sees retail investors using KRW to buy AI-themed assets, Hong Kong sees enterprises integrating settlements and custody into licensed channels, Japan sees retail moving from centralized platforms to decentralized exchanges and perpetual contracts, while mainland China sees stablecoins expanding between peer-to-peer wallets. Beneficiaries include South Korean thematic coin market makers, Hong Kong institutional custodians, and Japanese decentralized exchanges; those under pressure include South Korean platforms relying solely on traffic from old payment coins like XRP and local institutions still excluded from enterprise accounts.

Source: Public Information