South Korea Web3 Market Development Report Q1 2025: From Liquidity Export to Industrial Ecosystem

Key Points Overview

• The South Korean Web3 market is at a critical turning point, transitioning from a mere "Liquidity export" to a structured autonomous industrial ecosystem.
• Regulatory policies are being relaxed, and institutional entities are gradually being allowed to conduct cryptocurrency transactions through corporate accounts.
• Globally recognized projects are actively establishing a long-term foundation in South Korea, committed to building developer communities and hosting events such as hackathons.

1. Transformation of the South Korean Web3 Market

Despite high retail participation and ample Liquidity, the institutional infrastructure development in the South Korean Web3 market is progressing slowly. Regulatory focus is on investor protection rather than ecological development, which limits overall industry growth.

The main obstacles include: corporate accounts cannot be associated with cryptocurrency exchanges, and the threshold for obtaining a virtual asset service provider (VASP) license is too high. This makes it difficult for businesses to exchange cryptocurrency for fiat currency through local financial institutions.

However, market trends in the first quarter of 2025 indicate that South Korea is expected to shift from a speculation-driven market to an industry revitalization-oriented market. Recent regulatory improvements, such as allowing corporate accounts to engage in cryptocurrency trading, mark substantial progress. Global projects are steadily building ecosystems locally, expanding the builder community and launching new initiatives.

2. Regulatory Progress: Corporate Account Cryptocurrency Trading Opened

The Financial Services Commission of South Korea announced the "Roadmap for Corporate Participation in the Cryptocurrency Market" in February 2025, planning to gradually lift the corporate cryptocurrency trading restrictions that have been in place for seven years:

• Phase One (starting Q2 2025): Accounts will be opened to law enforcement agencies, non-profit organizations, and exchanges, limited to asset liquidation purposes.
• Phase Two (Starting in the second half of 2025): Allow professional investors such as listed companies and registered investment companies to conduct transactions.
• Phase Three (Medium to Long Term): Fully open the market to ordinary enterprises.

This progress lays a legal foundation for enterprises to develop Web3 businesses, with the expectation that participation from institutional investors will enhance market stability and promote the diversified development of financial services.

However, the phased relaxation of regulations may lead to an imbalance between supply and demand, putting downward pressure on prices. With the entry of listed companies and institutional investors, the government's efforts to strengthen tax supervision are expected to enhance. Additionally, the conservative risk management of institutional investors may result in a concentration of funds flowing into Bitcoin, raising concerns about the decline in the activity of the altcoin market.

3. Strategic Layout of Global Web3 Projects

Many international teams are actively recruiting Korean talent and establishing substantial cooperation, demonstrating a strategic shift from superficial marketing to building a sustainable, builder-led local ecosystem.

Project Support 3.1

A certain blockchain project and a certain foundation are building an ecosystem by directly supporting local teams in South Korea. These ecosystem support strategies have produced tangible results that go beyond short-term exposure or participation metrics, providing a more stable growth foundation for local developers while laying the groundwork for the international expansion of South Korean projects.

3.2 Hackathon

Multiple globally renowned projects have held hackathons in South Korea, which have transcended the scope of a single event and become a key turning point for the South Korean Web3 ecosystem. The scale and success of these events help to change the perception of South Korea as a speculation-driven market, reflecting the presence of a strong builder ecosystem.

4. Future Outlook of the South Korean Web3 Market

In the first quarter of 2025, the South Korean Web3 market is set to undergo a key transformation from an investment-driven environment to a mature industrial ecosystem. Regulatory advancements lay the foundation for structured market participation, while ongoing ecological construction efforts by global Web3 projects support the long-term growth positioning of the South Korean market.

Other important developments include:

• The Bank of Korea's central bank digital currency (CBDC) "Han River Project" has completed its first real-world retail transaction.
• Major commercial banks begin to explore the issuance of Korean won stablecoins.
• Discuss the establishment of a "One Exchange - Multiple Banks" system, which is expected to enhance market flexibility and user access.

In summary, the Web3 sector in South Korea is entering a new stage characterized by policy coordination, institutional participation, and the initial signs of industrial-level growth, demonstrating a clear trend towards the evolution of a sustainable industrial ecosystem.