Crypto Craze Fuels Stock Surge in South Korea

• The government plans to allow small firms to issue stablecoins.
• Following a record trading volume of 57 trillion won, the Bank of Korea is stepping up efforts to launch its official digital won.

Crypto adoption in South Korea has surged to new heights following the election of President Lee Jae-myung. 

The rising enthusiasm in the fast-evolving financial landscape is driving an increase in investors and pushing stock prices higher.

Why is the South Korean stock price rising?

Local media reports that the ruling party has named crypto advocate Kim Yong-beom as policy chief, signaling strong support for digital asset innovation.

One major proposal includes allowing small firms (with at least 500 million won in equity) to issue stablecoins. While this move excites markets, it has also raised concerns about systemic risk.

In response, stocks tied to stablecoin and digital currency projects have seen explosive gains. Kakao Pay and LG CNS have rallied over 100% and 70%, respectively.

Other crypto-linked stocks, like Aton and ME2ON, have also surged—rising more than 80% and nearly tripling during the same period.

Boosted by these rallies, the Kospi index is now up nearly 30% year-to-date, making it Asia’s best-performing market in the first half of 2025.

Retail frenzy and margin risk

The ongoing rally highlights growing interest in digital assets and is drawing in retail investors.

According to local media, South Korean retail investors are increasing their risk exposure, with margin loans soaring to 20.5 trillion won ($15 billion).

This spike in margin lending raises the risk of steep losses if the market pulls back—potentially affecting the wider financial system.

The government’s pivot toward stablecoins and digital currencies follows a surge in activity: South Koreans traded 57 trillion won ($42 billion) in U.S. dollar-pegged stablecoins.

In response, the Bank of Korea is now fast-tracking the development of its own official digital won.

Crypto ownership at record highs

In addition, a recent report from the Hana Institute of Finance revealed that 25% of South Koreans aged 20 to 50 now own digital assets.

Among them, people in their 40s made up the largest group at 31%, followed by those in their 30s (28%) and 50s (25%).

Notably, 78% of crypto investors in their 50s said they invest to “raise a large sum of money,” while 53% said they are preparing for retirement.

These figures reflect growing confidence and strong interest in South Korea’s expanding digital asset market.