The percentage of Koreans holding and using crypto has jumped in a surprising newly released statistics from Hana Financial Research Institute. According to the recent survey, 27% Koreans between 20 and 50 now hold digital currencies, a milestone that depicts how far crypto has gone mainstream in the Asian nation. Their crypto investments also make up 14% of their total portfolios.
In a study titled “2050 Generation’s Virtual Asset Investment Trends,” it showed that crypto interest cut across major working population groups, with those in their 40s leading at 31%. Those in their 30s followed with 28%, while 50s came last at 25%. South Korea is experiencing an adoption boom that seems never to end anytime soon, as citizens are becoming increasingly interested in digital assets.
What the Statistics Further Reveal
Of all respondents in their 50s, about 78% said they use crypto investments to amass funds. 53% said they use crypto as part of their retirement planning. Others said they saw crypto as a means of diversification and motivation for investing.
Moreover, 70% see themselves expanding crypto investments in the future. Furthermore, 42% said they would invest if traditional institutions played a key role in crypto markets, talking about custody and routing services. Only 35% of respondents cited regulations and investor protection as a key factor for venturing into crypto.
Desperation, Economic Activity Fuelling Korea’s Crypto Boom
Eli Ilha Yune, an executive at Anzaetek, believes that South Korea’s crypto boom isn’t driven by optimism about blockchain. He argues that young Koreans are moving into crypto out of financial desperation, seeking massive profits rather than supporting the ideals of crypto and its infrastructure.
Youth unemployment is high, and housing affordability is plummeting. Currently, youth unemployment stands at 6.6%, over double the national average. According to Yune, crypto offers both hope and a quick, high-yield alternative to wealth, which South Koreans see as perfect in their struggling economic growth.
However, some experts think the economic pressure is just part of the many reasons. For instance, South Korea leads in digital innovation, from gaming to payment. Recently, the central bank and key stakeholders in the new government backed the establishment of a won-pegged stablecoin. Tech and innovation are both fueling interest in crypto.
Koreans’ Crypto Embrace Will Lead to Accelerated Adoption on a Broader Scope
Korea’s increasing appetite for crypto, coupled with its infrastructure, will signal to other economies in Asia to adopt crypto. In addition, its smart regulations will build trust and also serve as a benchmark for other Asian economies.
Korea passed the Virtual Asset User Protection Act, which will make institutions access crypto. protected. Recently, the country has been contemplating launching a won-based stablecoin. This not only highlights the growing synergy between banks, Fintech, and exchanges but also shows that the future of remittances and payments is in the hands of crypto.
What’s Next for South Korea?
The Bank of Korea recently suspended all CBDC trials due to the government’s support for local currency stablecoins. Although the pause is temporary, the newly elected government may abandon CBDC trials completely and endorse the use of won-backed stablecoins.
Apart from the legislation regarding the won-pegged stablecoin, Korea is preparing for crypto ETFs, following the global trend. Institutions are embracing crypto, but traditional investors are conservative. An ETF will grant them more exposure to these assets without owning them.
Additionally, further regulations may be introduced regarding the one exchange-one bank system. More banking institutions will come on board to reduce retail scaling issues and offer crypto users more options. Furthermore, banks may roll out custodial services and innovative products that support lending.