Cryptocurrencies’ widespread popularity in South Korea can be attributed to multiple factors. Among these are three particularly significant reasons.

New legislation was enacted by the South Korean National Assembly in March 2020, marking a shift toward regulation and potential legalization for crypto exchanges and digital currencies.

Even amid the COVID-19 pandemic, this legislative change acknowledged the explosive expansion of the cryptocurrency sector. The new rules aimed to establish structures for anti-fraud measures while fostering a burgeoning industry.

South Korean enthusiasm for digital assets was palpable as investors rushed into the digital currency realm. According to a 2021 survey, around 40.4% of 1,885 queried employees had ventured into cryptocurrency investments. Particularly notable was the age group of 30 to 39 years, where nearly 49.8% had engaged in crypto assets. Young workers in their twenties followed closely, with about 37.1% already participating. However, such widespread enthusiasm didn’t go unnoticed, drawing scrutiny from regulators and nefarious actors alike.

In 2021, virtual asset service providers came under regulation following March updates to the Act on Reporting and Using Specified Financial Transaction Information. These updates incorporated mandates for virtual asset pricing in fiat currency, real-name accounts, and other compliance standards.

Though economically prosperous, South Korea grapples with youth unemployment, a primary catalyst for cryptocurrency’s appeal. Many young people see digital currencies as a path to financial stability in a turbulent job market.

The core issue exacerbating youth unemployment lies in the mismatch between the number of graduates and available job opportunities. A July survey from Statistics Korea highlighted that nearly 43% of individuals aged 15 to 29 not engaged in education, employment, or training (NEET) who expressed a desire to work couldn’t secure jobs aligning with their pay and condition standards.

Another factor driving cryptocurrency’s allure is South Korea’s openness to new technologies, facilitating its integration within society. The nation ranks among the quickest to embrace cutting-edge innovations, such as video games and social networks, facilitated by its advanced telecommunications infrastructure and high-speed internet.

South Korea’s thriving gaming industry has accustomed its residents to electronic micropayments, a concept now gaining momentum in the West. Around this industry, businesses and black markets have taken root.

The climate of political unpredictability adds to cryptocurrencies’ attractiveness. South Korea is continually aware of potential threats from its northern neighbor, fostering a sense of unease about political stability.

Given that cryptocurrencies operate outside any single national jurisdiction, they attract South Korean investors wary of North Korea’s volatile intentions.

Year 2024: An Evolving Regulatory Landscape

By July 2024, South Korea’s Virtual Asset User Protection Act had been implemented. It provides a framework for issuing decrees to safeguard traders from exploitative practices. Together with previous amendments, these measures offer clearer guidelines and stronger protection for investors in the region.

Is Crypto Still a Hit in South Korea?

Despite North Korea’s opaque policies, cryptocurrency continues to thrive in South Korea.

Is Trading Crypto Allowed?

Indeed, trading cryptocurrency is legal in South Korea, though digital currencies are treated as assets, not currency.

Which Nation Leads in Crypto Trade?

Chainalysis’ Global Crypto Adoption Index lists India as the top country for crypto exchange activity, with the U.S., Vietnam, and Pakistan trailing. It’s significant to recognize that not all activity involves trading; many people use exchanges to integrate cryptocurrency into everyday financial tasks.

The combination of economic challenges, a tech-savvy populace, and political factors creates fertile ground for cryptocurrency adoption in South Korea. A country known for leading technological trends, South Korea might once again be at the forefront by fully embracing cryptocurrencies in its mainstream financial landscape.