South Korean Overseas Retail Investors Pivot to Stablecoin-Tied Stocks: Report

A fresh report by the Korean Center for International Finance (KCIF) states that South Korean nationals who invest in overseas stocks have increasingly pivoted to crypto-tied shares, particularly stablecoins.

Retail Korean investors purchasing U.S. big tech shares dropped from a monthly average of $1.68 billion between January and April to $440 million in May, the report said. It further sank to $670 million in June and $260 million in July, according to Yonhap News.

“Investments in virtual assets, particularly in shares related to stablecoins, have expanded following the passage of the U.S. GENIUS Act,” the report seen by Cryptonews, said.

US President Trump signed GENIUS Act, a landmark stablecoin legislation, into law, despite pushback from US lawmakers.

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

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.

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