Chainalysis said in its East Asia Crypto Adoption Report, released on Oct. 5, that crypto activity across East Asia contracted slightly between July 2025 and June 2026 as the global bear market weighed on the sector, but the region did not move in one direction. South Korea remained the largest retail trading center, Hong Kong was turning into a settlement hub for institutional capital, Japanese users were shifting more quickly toward decentralized exchanges and perpetual futures, and peer-to-peer stablecoin use in mainland China continued to expand.
South Korea remained the largest crypto economy in East Asia
The report estimated South Korea’s crypto economy at $449.1 billion for the period, up 12.3% from the previous cycle and still the largest in East Asia. Japan followed at $228.3 billion, with Hong Kong at $192.2 billion, mainland China at $176.3 billion, and Taiwan at $140.4 billion.
Chainalysis said the increase in South Korea was driven mainly by larger flows tied to trading platforms. It estimated about $51.1 billion in new flows across the local exchange ecosystem.
AI tokens became the biggest thematic trade in KRW markets
The clearest shift in South Korea came from trading in AI tokens. As of June 2026, AI-related crypto assets had become the largest thematic segment in KRW-denominated trading, overtaking payment-focused tokens such as XRP, according to the report.
Chainalysis said Worldcoin (WLD) recorded $7.41 billion in trading volume during the observation period. SAHARA, VIRTUAL, BIO, and NEAR also ranked among the active tokens in the market. The report added that the share of KRW-denominated trading in AI tokens was about 19.5 times the level seen in the JPY market, a sign that South Korean retail traders were extending their AI investment preference from the domestic equity market into crypto.
Institutional capital is still in preparation mode
The report also said institutional participation in South Korea remains at an early stage. Local banks and brokerages have broadly set up digital asset teams and are pushing ahead with pilots in stablecoins, custody, and tokenization, but direct corporate participation in crypto investment has not yet reached scale.
Chainalysis said the retail-dominated structure of the South Korean market could be reassessed if the country’s planned tax on crypto asset gains takes effect in 2027 as scheduled and restrictions on corporate trading continue to ease.