Crypto Gains Traction in South Korea and Hong Kong Through Institutional Support

Eastern Asia has emerged as the sixth largest crypto economy in the world in 2024, as per a recent report by analytics firm Chainalysis. Institutional players are leading a surge in cryptocurrency adoption in South Korea and Hong Kong, two of Eastern Asia’s most prominent markets.

The Eastern Asian region fetched more than $400 billion in on-chain value between July 2023 and June 2024, the report noted.

Furthermore, South Korea remains the largest crypto market in Eastern Asia, receiving about $130 billion in cryptocurrency value during the study period. Since early 2023, South Korea’s share of regional transaction value has steadily increased. As per a top executive from a leading South Korean exchange, several factors contributed to this growth.

“Mistrust in traditional financial systems has led investors to seek out cryptocurrencies as alternative assets. The public’s perception of crypto as a viable investment option has been further solidified by the adoption of blockchain by major corporations like Samsung and large enterprises in the region that are working to enhance operational transparency and efficiency,” the official noted.

Another executive opined that South Korea provides the ground for digital asset trading via mobile apps and personal computers (PCs). He shared that the public’s interest in crypto spiked after Bitcoin surpassed $70,000 in January 2024.

This resulted in altcoins, particularly those paired with the Korean Won (KRW), seeing the most significant outflows to global exchanges. Stablecoins have also experienced higher outflows, especially after the USDT listings on major Korean exchanges like Coinone and Bithumb in late 2023.

Additionally, Ripple has been very popular in South Korea, primarily due to its quick transfer times, completing transactions in approximately two seconds. It is also cheaper than Bitcoin and Ethereum.

Hong Kong’s Regulatory Shift Fuels Institutional Crypto Growth

The report also shared the emergence of Hong Kong as a crypto hub in Eastern Asia. “Unsurprisingly, Hong Kong has experienced the largest year-over-year growth in Eastern Asia at 85.6%, and ranks 30th in the world on our Global Crypto Adoption Index,” the report said.

In June 2023, Hong Kong’s regulators introduced a new regime for virtual asset trading platforms (VATPs). This regime reportedly offers a structured approach for individual investors to enter the cryptocurrency market while enforcing strict guidelines on safety, consumer rights, and anti-money laundering measures. Hong Kong’s regulatory bodies have been actively working on implementing this new regime over the past year.

The transition period to this new regulatory framework ended on May 31, 2024. Only licensed exchanges or those “deemed” to be licensed could operate in Hong Kong.

Apart from this, the region has seen a notable increase in the use of stablecoins as well. It accounted for more than 40% of the total value received by the region each quarter. This trend is expected to grow as the Hong Kong Monetary Authority’s regulatory framework for stablecoins comes into full effect.

Notably, institutional interest in Bitcoin surged in Hong Kong ahead of the April 2024 approval of Bitcoin and Ether-based spot ETFs by the Securities and Futures Commission (SFC).

Kevin Cui, chief executive officer of crypto exchange OSL, a leading digital asset trading platform in Hong Kong shared there has been a growing institutional interest in the space.

“These ETFs have not only provided a regulated pathway for investment in digital assets but have also spurred interest in direct holdings in BTC and ETH. This shift is significant, as it marks a transition from traditional financial instruments toward more direct engagement with digital assets,” he noted.

Gairika holds positions in BTC. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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