The 82 Trillion Won Gap: The Corporate Market South Korea Missed

Key Takeaways

• The South Korean virtual asset market is heavily reliant on individual investors due to restrictions on corporate participation, despite high trading volumes. Allowing corporate accounts is the next step to broaden the market's demand base.
• If corporate accounts are permitted, the scale of corporate virtual asset management could reach up to 82 trillion won by 2030. There is also an expected annual revenue opportunity of about 570 billion won from related financial services such as trading, custody, and prime brokerage.
• The longer the allowance of corporate accounts is delayed, the more domestic demand and business opportunities may shift overseas. This trend is already evident in payments and asset management, and the longer the domestic market remains closed, the higher the likelihood that customer and business experiences will accumulate abroad first.

1. Absence of Institutions: A Stagnant South Korean Virtual Asset Market

South Korea is one of the active markets in the global virtual asset market. This can be confirmed by looking at the trading volume of virtual assets based on fiat currencies. Among major fiat currencies such as the dollar, euro, and yen, the trading proportion of the won has recently remained around 30%, the second highest after the dollar. In the past, the won's share exceeded 50%, surpassing the dollar. Considering South Korea's population and economic scale, this is an unusually high level.

However, this high proportion of won trading has not translated into substantial growth for the domestic virtual asset industry. Comparing the corporate values of major domestic players with global players clearly highlights this difference. Although there are limitations to simple comparisons due to differences in capital market sizes and business scopes by country, the gap in corporate values is significant. For instance, the corporate value of Dunamu, South Korea's largest virtual asset company, is only about one-seventh that of Coinbase.

The background of this difference lies in the market structure that has grown around individual investors. The domestic virtual asset market has developed based on high trading participation from individual investors, but corporate participation has been institutionally restricted. In contrast, in the U.S., institutional investors account for over 80% of Coinbase's trading volume, forming a significant pillar of market demand. While the trading volume is large, the domestic market has essentially been devoid of the corporate demand that could drive the next growth of the industry.

2. Delayed Allowance of Corporate Accounts: The Remaining 82 Trillion Won Potential Market

The opening of the corporate market is delayed compared to initial plans. The Financial Services Commission has proposed to first allow investment purpose transactions for about 3,500 listed companies and registered professional investors by 2025, then gradually expand the participant scope. However, the investment purpose transactions for these corporations have yet to be implemented, and the timeline for expanding to general corporations has not been specified. As the allowance of corporate accounts is delayed, the inflow of corporate funds into the domestic market is also restricted.

Allowing corporate accounts could broaden the demand base of the domestic virtual asset market. To estimate how much corporate participation could expand the market size, we based our potential market size on the managed assets of domestic private financial companies and public funds such as pension funds. Assuming the upper limit of the initial market based on the level of virtual asset inclusion in markets where corporate participation is active, it is estimated that the scale of virtual asset management by domestic corporations could reach about 16 trillion won by 2027.

As corporate participation expands, the market size could grow even larger. After 2028, we reflected both the increase in managed assets and the expansion of virtual asset inclusion. We applied the discussed investment limit of 5% for private financial companies and a conservative 2% for public funds like pension funds. Accordingly, the scale of corporate virtual asset management could increase from 35.2 trillion won in 2028 to 57.1 trillion won in 2029, and reach up to 82 trillion won by 2030. This represents the upper limit of the potential market assuming sufficient expansion of corporate participation, and the actual scale may vary depending on the pace of regulatory opening and market conditions.

2.1. A 570 Billion Won Corporate Financial Services Market

Allowing corporate accounts could expand the entire virtual asset financial services market beyond just increasing trading volumes. Corporations need to execute large orders reliably and require a system to manage their assets securely. Therefore, demand will expand not only for exchanges but also for services that support the trading, custody, and management of corporate assets, such as custody and prime brokerage.

When this demand is converted into revenue, the market size becomes even clearer. If we apply the revenue structure of the overseas corporate market, approximately 570 billion won in annual revenue could be generated from the 82 trillion won in corporate managed assets by 2030. This includes revenue generated from corporate trading fees as well as services supporting custody, trade execution, and asset management.

As corporate managed assets increase, the surrounding financial services market will also grow. Financial services targeting corporations, such as custody and prime brokerage, could add a new revenue base to the domestic virtual asset industry, which has been focused on individual trading fees.

2.2. The Expanding Virtual Asset Industry Beyond Trading

Corporate accounts are necessary not only for investment purpose transactions but also for companies to develop businesses utilizing virtual assets. Stablecoin payments and remittances are representative examples. These services can only operate smoothly if companies can trade virtual assets directly and settle in won. In South Korea, the restriction on corporate trading has not sufficiently created conditions for related businesses to grow.

Abroad, various businesses utilizing virtual assets have already grown. Companies providing payment and settlement infrastructure, such as Rain, BVNK, and Mesh, are notable examples. Although there are limitations to simple comparisons due to different evaluation methods for listed and unlisted companies, it is noteworthy that these related companies are recognized with valuations in the trillions of won.

If corporate accounts are allowed, the conditions for developing related businesses in South Korea will expand. Payment companies and fintech firms can expand payment and remittance services utilizing virtual assets, and general companies can also use virtual assets in payment and settlement processes. The opening of corporate accounts could serve as a foundation for the domestic virtual asset industry to expand beyond a trading-centered market into new business areas.

2.3. Improved Trading Environment with Corporate Participation

The domestic virtual asset market has formed high trading volumes based on active participation from individual investors. However, its ability to handle large orders differs significantly from major global exchanges. An analysis of Bitcoin spot trading over the past week revealed that even when combining the three major domestic exchanges, the round-trip slippage for a 10 billion won order was 213.2 basis points, while Binance recorded only 12.2 basis points under the same conditions. As the order size increases, the gap between domestic and international markets widens significantly.

This indicates that the market depth necessary to absorb large orders is insufficient compared to the trading volume in the domestic market. Even with active trading, if there is a lack of buy and sell volumes to accommodate large orders, the impact on prices increases as the order size grows. The domestic market has a relatively weak liquidity base to handle large transactions compared to its trading volume.

It is estimated that allowing corporate accounts will help alleviate these limitations as the market participants diversify and the involvement of professional liquidity providers expands. If buy and sell orders become thicker, the price impact and transaction costs associated with large orders could decrease. Improving liquidity is expected to benefit not only large corporate transactions but also enhance the trading efficiency of individual investors.

3. Business Opportunities Moving Overseas: The Golden Time is Running Out

As the allowance for corporate accounts is delayed, the demand for virtual assets from domestic companies is already connecting with overseas markets. According to Allium data, the scale of stablecoin payments confirmed between South Korea and foreign countries from January 2021 to September 2026 amounts to approximately 620 million dollars. This figure only accounts for payments made for goods and services, excluding deposits and withdrawals from exchanges and investment-related transactions. This shows that the demand for payments and settlements using stablecoins has already formed in corporate activities, not just for investment purposes.

The problem is that this demand is not sufficiently translating into domestic business. Some trading companies find it difficult to handle stablecoins directly in South Korea, leading them to cash out and settle through overseas corporations or partners in places like Hong Kong. In investment and management, Hyperithm is expanding its virtual asset management business targeting corporations in Japan, while Mirae Asset Securities is also expanding its digital asset-related business in Hong Kong. Demand and business capabilities generated domestically are first being connected to business in overseas markets with established regulatory foundations.

As this trend continues, not only customers and profits but also trading relationships and business experiences accumulate overseas. Once a payment network and trading relationships are established, it will be challenging for them to return immediately when the domestic market is eventually opened. Businesses are also likely to continue investing in markets where customer and operational experiences have been built. The delay in allowing corporate accounts may not only postpone the influx of funds but could also result in losing business opportunities that could be formed domestically to overseas markets first.

4. The Next Step for the Domestic Virtual Asset Market: Allowing Corporate Accounts

Allowing corporate accounts can create a new financial services market beyond just the influx of corporate funds. As previously estimated, by 2030, the scale of virtual asset management by corporations could reach up to 82 trillion won, generating approximately 570 billion won in annual revenue from trading, custody, and prime brokerage services. As corporate funds increase, the demand for services to trade, store, and manage these assets will also expand.

The impact will not be limited to financial services. As the utilization of virtual assets by companies increases, the demand for related businesses such as payments, remittances, accounting, taxation, security, anti-money laundering (AML), and data could also grow. The crucial point is whether this demand translates into business within the country. If trading and related services occur domestically, revenue and business experiences will accumulate for domestic companies, making it easier to understand trading flows and broadening the basis for taxation and market supervision.

South Korea already has a high trading volume and sufficient demand for virtual assets. However, the limited participation of corporations has prevented this demand from sufficiently translating into the growth of financial services and related industries. Allowing corporate accounts is the next step to connect the already existing demand for virtual assets to the growth of the domestic industry and to broaden the market, which has primarily grown around individuals, to include corporations and businesses.

Disclaimer

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