Why South Korean Retail Investors Are Dumping Volatility for Stablecoin-Linked Stocks

Seoul's retail traders are flipping the script—ditching crypto's rollercoaster for stocks pegged to stablecoins. Smart hedge or just another way to lose money slowly?

The Stablecoin Safety Play

Faced with Bitcoin's wild swings, overseas investors are parking capital in equities tied to fiat-backed tokens. No more 20% daily drops—just the thrill of watching paint dry.

Regulators Hate This One Trick

While the FSA frets over crypto risks, traders are quietly using stablecoin-correlated stocks to bypass capital controls. Old-school finance never saw this loophole coming.

Cynical Take
: Because nothing says 'financial innovation' like using blockchain to recreate 1980s money market funds—but with extra steps.

Crypto Stocks Increasingly Become Investor Priorities

Local individual investors increased their digital asset stock investments from 8.5% in January to 36.5% in June, KCIF added. However, the proportion of crypto stocks declined to 31.4% in July.

“Since June, the domestic stock market has outperformed overseas markets, while the local currency has strengthened, prompting individual investors to withdraw their investments from foreign markets,” the report read.

This arrives weeks after South Korea’s Financial Supervisory Service (FSS) instructed local asset managers “not to excessively include” crypto stocks like Coinbase and Strategy in their ETFs portfolios.

South Korea FSS has issued verbal guidance to domestic firms, restricting the proportion of crypto companies in ETFs.#SouthKorea #Coinbase #ETFshttps://t.co/cTpwhutu6U

Here’s Why Stablecoin Stocks are in Focus

The investor shift among South Koreans is mainly confined to stablecoins, according to the report. This is because the nation has been a global powerhouse when it comes to the crypto industry.

Several South Korean banks are planning well ahead to dive into stablecoin businesses ahead of regulatory reforms. For instance, Kakao Bank has announced plans to launch a KRW-backed stablecoin this year.

Besides, the stablecoin regulatory cloud is clear in South Korea, following the newly elected President Lee Jae-myung’s pledge to launch a KRW-pegged coin for use in business and international trade.

With concerns about the impact of the U.S. tariffs, South Korean retail investors are unlikely to actively invest in US stocks at present, the report said.