In South Korea’s cryptocurrency market, Tether and Circle are growing increasingly prominent, which is a rather interesting development. Behind this is the South Korean government’s plan to codify the second phase of the “Digital Asset Basic Act” in 2026. This appears to be greatly accelerating both companies’ strategies in South Korea.

Looking at recent developments, Tether has begun hiring in South Korea for roles focused on government-related departments and blockchain investigations. In other words, it is at the stage of establishing a physical base in Seoul and ramping up preparations to meet local regulatory requirements. Meanwhile, Circle has also been steadily increasing its presence since their leadership visit last year. Their focus is on deepening liquidity and exploring the potential of won-pegged stablecoins.

Competition in the stablecoin market is also intensifying. USDT remains the center of high-volume trading, while USDC is gaining support among users who prioritize transparency. At present, USDC’s market share is about 2.88%, and adoption is expanding at major Korean exchanges such as Korbit and Coinone. By contrast, USDT’s market share is 7.00098%, which is overwhelming.

This improvement in liquidity will bring tangible benefits to participants in the Korean market. Historically, the Korean market has been known for the “kimchi premium,” and capital controls have caused prices to deviate significantly from global levels. The rising trading volumes of Tether and Circle could become an important conduit for bridging the gap between the Korean won market and global dollar liquidity.

Regulatory developments are also worth keeping an eye on. Through its 2026 economic growth strategy, the South Korean government has hinted at plans to lift certain prohibitions on corporate investments in crypto assets. If this comes to pass, institutional investors would be able to rely on highly liquid “in-ramp and out-ramp” mechanisms, and the presence of an official branch of one of the world’s largest stablecoin issuers could significantly reduce counterparty risk. This could accelerate a shift away from speculative retail trading toward a more mature financial ecosystem.

Details of the regulatory framework also matter. The key objectives being discussed by the government include mandating reserve backing of 100% or more, guaranteeing users’ rights to exchange smoothly into fiat currencies, and requiring foreign companies to appoint local legal representatives. All of these are fully aligned with the local expansion that Tether and Circle are currently advancing.

Over the long term, the potential for won-pegged stablecoins is also coming into focus. Circle has already indicated interest in providing this kind of infrastructure. If realized, it would enable 24/7 real-time remittances within the Korean economy and dramatically reduce transfer costs. However, the Bank of Korea has remained cautious due to concerns about currency sovereignty and capital outflows.

Over the next 18 months, dialogue between global tech companies and Korean regulators is likely to be the key factor shaping the market’s evolution. In particular, the focus will be on how much permission will be granted to non-bank but highly regulated international issuers. As market participants, it is worth closely tracking these regulatory developments, including community discussions on platforms such as discord. That’s because the maturation of the Korean market could have a major impact on the digital asset ecosystem across Asia as a whole.