Analysis of the South Korean Web3 Market in Q1 2025: From Liquidity Export to Industrial Ecosystem

Key Points Overview

• The South Korean Web3 market is undergoing a significant transformation, evolving from a simple "Liquidity export" to a structured autonomous industrial ecosystem.
• The Financial Services Commission has relaxed regulations on corporate accounts, allowing institutional entities to gradually engage in cryptocurrency trading.
• Globally recognized projects such as Avalanche, TON, Ripple, and Solana are actively establishing a long-term presence in South Korea, focusing on developer community building and hosting hackathons and other events.

1. The Current Status and Challenges of the South Korean Web3 Market

Despite the high participation of retail investors and sufficient Liquidity, the institutional infrastructure development in South Korea's Web3 market is progressing slowly. The regulatory focus is on investor protection rather than ecological development, which hinders the overall growth of the industry.

The main obstacles include:

1. Restrictions on enterprise accounts associated with cryptocurrency exchanges
2. High threshold for obtaining a Virtual Asset Service Provider (VASP) license

These institutional constraints, coupled with investor activity far exceeding the maturity of the local ecosystem, have led some projects to view South Korea primarily as a customer acquisition channel. However, the market developments in the first quarter of 2025 indicate that South Korea has the potential to transition from a speculation-driven market to an industry revitalization-oriented market.

2. Institutional Progress: Opening of Cryptocurrency Trading for Enterprise Accounts

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

• Phase One (Starting 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 companies and other professional investors to trade.
• Phase Three (Medium to Long Term): Fully open the market to ordinary enterprises

This development lays a legal foundation for South Korean companies to engage in Web3 business, with the potential to enhance market stability through institutional investors and promote diversification of financial services.

However, this policy may also bring some risks, such as supply and demand imbalance leading to downward price pressure, tightening tax policies, and institutional investors possibly becoming overly concentrated in Bitcoin investments.

3. Industrial Transformation: Strategic Layout of Global Web3 Projects

Numerous international teams are actively recruiting Korean talent and establishing substantial cooperation, demonstrating a strategic shift from surface-level marketing to building a sustainable, builder-led local ecosystem.

3.1 Project Support

Avalanche and the TON Foundation are building an ecosystem by directly supporting local teams in South Korea. Avalanche regularly holds demo days, while the TON Foundation has launched the "TON Society Korea Builder" program to provide a stable growth foundation for local developers.

3.2 Hackathon

The large hackathon hosted by XRPL Korea (Ripple) and Superteam Korea (Solana) has become a key turning point for the Web3 ecosystem in South Korea, attracting hundreds of participants and showcasing the strong builder ecosystem in Korea.

4. Conclusion: The Turning Point of the South Korean Web3 Market

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 groundwork for structured market participation, while the ongoing ecological construction efforts of global Web3 projects support the South Korean market in achieving long-term growth positioning.

In addition, the progress of South Korea's central bank digital currency (CBDC) "Han River Project", the exploration of the issuance of won stablecoins by commercial banks, and the discussions on the "one exchange - multiple banks" system all indicate that South Korea's Web3 field is evolving towards a sustainable industrial ecosystem.