South Korea's stablecoin outflow continues for 18 months, offshore demand grows

The scale of stablecoin transfers is comparable to South Korea's overseas stock trading volume.

Offshore leveraged trading exacerbates regulatory and investor risks.

South Korea's net outflow of stablecoin reached 560.3 billion won in June, continuing the 18-month trend of capital outflow. Data shows that since January 2025, the cumulative net stablecoin transfers has reached nearly 14.9 trillion won. The monthly outflow in June was equivalent to 77.6% of the total net overseas stocks purchased by South Korean retail investors that month. Offshore platforms continue to attract South Korean traders with products such as derivatives, DeFi, pledges, and tokenized assets.

South Korea recorded a net transfer of stablecoins to overseas exchanges for the 18th consecutive month in June, highlighting the continued demand for offshore crypto products. The five major won denominated exchanges sent 2.7625 trillion won overseas and received 2.2022 trillion won, with a net outflow of 560.3 billion won. Although the total outflow in June was lower than multiple peaks in 2025, the sustainability of capital flows itself is more meaningful than the size of a single month. Data shows that the monthly net outflow fluctuates between 459.3 billion won in July 2025 to 1.2049 trillion won in February 2025.

According to disclosed monthly data, the cumulative net transfer scale has reached approximately 14.9 trillion won in the full cycle starting from January 2025.

The scale of stablecoin transfers is comparable to South Korea's overseas stock trading volume

The June net outflow was equivalent to 77.6 percent of the total net overseas stock purchases (722 billion won) by South Korean retail investors for the month. The gap widened further in the second quarter, with a net outflow of stable coins of 1.6872 trillion won. During the same period, South Korean investors became net sellers of overseas stocks, reducing the value of overseas stocks by 1.6185 trillion won. This comparison suggests that dollar-linked tokens have become an important conduit for capital outflows alongside traditional overseas investments.

However, this data measures exchange transfers rather than permanent capital flight, as tokens may flow back, remain in wallets, or enter decentralized applications. It is worth noting that access remains the core driver of capital flows-local exchanges are still mainly concentrated on spot trading. In contrast, offshore platforms offer perpetual contracts, pledges, decentralized finance, tokenized real assets, and leveraged products linked to South Korean companies. These products have covered Samsung Electronics, SK Hynix, Hyundai Motor and other targets, greatly expanding the scope of overseas tradable markets.

Another study found that approximately 47 trillion won in crypto-assets flowed overseas or in personal wallets in the first half of 2026. Tiger Research and Chainalysis also reviewed 4.5 million wallets and estimated that the cumulative transfer volume since 2021 has reached 687.6 trillion won. The same study estimates that overseas transaction activities generate approximately 1.4 trillion won in fees.

Offshore leveraged trading exacerbates regulatory and investor risks

Among the main destinations, Hyperliquid offers perpetual contracts linked to South Korea with leverage multiples of up to 50 times. In addition, the scale of SK Hynix-related transactions has reportedly reached approximately US$4 billion since the contract was launched in February. This suggests that stablecoins serve as collateral and settlement assets in global on-chain markets, rather than just digital savings vehicles. This expansion also increases the risks of liquidation losses, security breaches and platform failures that investors face outside South Korea's domestic regulatory system.

As a result, Bank of Korea officials warned that the expansion of token use could complicate capital flow management and foreign exchange regulation. President Lee Chang-yong previously said that tokens backed by the won may reduce demand for the US dollar and make it easier to convert into assets pegged to the US dollar. Meanwhile, the Financial Services Commission said in January that the core provisions of the second phase of digital asset legislation had not yet been completed. Unresolved issues include the ownership structure of stablecoin issuers under the plan framework.

MP Lee Chung-wok urged regulators to review the regulatory framework and investor protection measures as offshore transfers continue to grow. Currently, an 18-month fund flow pattern shows that investors are continuing to use dollar-linked tokens to obtain products that are not available on domestic exchanges.