South Korea Web3 Market Development Report Q1 2025: From Liquidity Export to Industrial Ecosystem

Key Points Overview

• The South Korean Web3 market is transitioning from a "liquidity export" of global projects to a self-sustaining industrial ecosystem.
• Regulatory restrictions on corporate accounts have been relaxed, allowing institutional entities to gradually engage in cryptocurrency trading.
• Global projects are actively establishing a long-term foundation in South Korea, dedicated to developer community building and hackathon events.

1. The Current State of the Web3 Market in South Korea in Q1 2025

Despite high participation from retail investors and ample Liquidity, the institutional infrastructure development in the South Korean Web3 market is progressing slowly. Regulatory focus is on investor protection rather than ecosystem development, which has delayed overall industry growth.

The main obstacles include restrictions on the association between corporate accounts and cryptocurrency exchanges, as well as the high barriers to obtaining a Virtual Asset Service Provider (VASP) license. These institutional constraints, combined with investor activity far exceeding the maturity of the local ecosystem, have led some projects to regard South Korea primarily as a customer acquisition channel.

However, the market development in the first quarter of 2025 shows that South Korea has the potential to shift from a speculation-driven market to an industry revitalization-oriented market. Recent regulatory improvements (such as allowing corporate accounts to engage in cryptocurrency trading) mark substantial progress in structural reforms. Global projects are steadily building a local ecosystem with the support of an expanding builder community and emerging new initiatives.

2. Systematic Progress: Opening Up Cryptocurrency Trading for Corporate Accounts

The Financial Services Commission (FSC) announced the "Roadmap for Corporate Participation in the Cryptocurrency Market" on February 13, 2025, which will lift the corporate cryptocurrency trading restrictions that have been in place for seven years in three phases:

• Phase One (starting in Q2 2025): Accounts will be opened to law enforcement agencies, non-profit organizations, and cryptocurrency exchanges, limited to asset liquidation purposes.
• Phase Two (starting in the second half of 2025): Allow listed companies and registered investment firms and other professional investors to trade.
• Phase Three (Medium to Long Term): Fully open the market to ordinary enterprises.

This progress lays a legal foundation for enterprises to carry out Web3 business, is expected to enhance market stability through institutional investors, and promote the diversification of financial services such as cryptocurrency funds and custody services.

However, a phased relaxation of regulations may lead to an imbalance between supply and demand, putting downward pressure on prices. As listed companies and institutional investors enter the market, the government's efforts to ensure tax revenues are expected to strengthen. The conservative risk management of institutional investors may lead to a concentration of Bitcoin holdings, raising concerns about a decline in the activity of the altcoin market.

3. Industrial Transformation: Strategic Layout of Global Web3 Projects

After the US and China, South Korea has become a core strategic market for global Web3 projects. Numerous international teams are actively recruiting South Korean talent and establishing substantial collaborations, showcasing a strategic shift from surface-level marketing to building a sustainable, builder-led local ecosystem.

3.1 Project Support: Support for Mature Teams

Avalanche and the TON Foundation are supporting local Korean teams to build an ecosystem. Avalanche regularly holds demo days to showcase available products and attract users, while the TON Foundation has launched the "TON Society Korea Builder" program to provide systematic support.

These ecological support strategies have produced tangible results beyond short-term exposure or participation metrics, laying the foundation for the international expansion of Korean projects.

3.2 Hackathon: Cultivating Builders and Strengthening Market Potential

The hackathon hosted by XRPL Korea (Ripple) and Superteam Korea (Solana) has become a key turning point for the Web3 ecosystem in South Korea. These events are large in scale and have high participation rates, reflecting the presence of a strong builder ecosystem and providing builders with a clear market entry path.

4. Turning Point of the Web3 Market in South Korea

In the first quarter of 2025, the South Korean Web3 market will undergo a key transformation from an investment-driven environment to a mature industrial ecosystem. Regulatory progress lays the foundation for structured market participation, and ongoing ecological construction efforts by global Web3 projects will support the South Korean market in achieving a long-term growth positioning.

The Bank of Korea's Central Bank Digital Currency (CBDC) "Han River Project" successfully completed its first real-world transaction with retail users, and major commercial banks are beginning to explore the issuance of a Korean won stablecoin. The discussion of a "one exchange - multiple banks" system suggests potential structural breakthroughs.

These developments clearly demonstrate the evolution of South Korea's Web3 sector towards a sustainable industrial ecosystem. South Korea is entering a new phase characterized by policy coordination, institutional participation, and the initial appearance of industrial-level growth.