South Korea’s Crypto: Gaming Reigns Supreme in the World of Web3 Amidst the Terra Controversy
[TL; DR]
The web3 gaming sector in South Korea has been growing over the past several months.
Various crypto exchanges in South Korea have formed partnerships with traditional banks.
South Korea has a well-developed crypto regulation framework that protects both investors and cryptocurrency businesses.
Introduction
South Korea, a country with a tech-savvy population, proactive crypto regulations and a dynamic digital industry, is emerging as a prominent player in the blockchain sector. Today, we look at how the country is poised to become a web3 hub despite last year’s Terra collapse that affected many crypto lovers in the country.
South Korea Recovery from Terra Debacle
Within the recent months South Korea has proved to be a blockchain activity hub despite experiencing the collapse of Terra, one of the greatest crypto projects of that period. Recent activities in the country have indicated that South Koreans are resilient and are making many huge initiatives to take the crypto sector in the country to another level.
The 2023 Korea Blockchain Week (KBW) proved that the country has many running and developing web3 projects. It showed how many local developers and other gaming players are performing in the digital sector.
Sadly, the Terra collapse still influences various investor and government decisions in the country. In fact, many individuals and crypto projects remain cautious when making investments.
Hoon Kim, CTO at blockchain project Astar, recently said that the Terra collapse has enabled crypto projects and developers to focus on businesses with real-life use cases. They no longer develop digital projects whose performance merely depends on market hype.
Primarily, the collapse of Terra, the blockchain project founded by Do Kwon, with a market capitalization of over $40 billion, shaped the new trajectory of crypto in Korea. Nonetheless, the current drive in the blockchain sector shows that although most players learned much from the collapse of Terra, they have put that debacle behind them.
Read also: Do Kwon Reaches 5-star Wanted level as SEC Brings More Fraud Charges
South Korea’s New Crypto Trajectory after Terra Collapse
Close to one year after the collapse of Terra, the digital sector in South Korea is more vibrant than ever before. As an example, the country is witnessing a new surge of crypto trading, higher participation of the traditional finance sector in DeFi as well as a rise in blockchain research and development. Let’s briefly look at these developments.
Traditional Banks Participation in the Crypto Sector
Several South Korean banks are partnering with different web3 projects like gaming platforms. For example, Hana Bank, a South Korean commercial bank, partnered with BitGo, a California-based crypto project that offers cryptocurrency custodian services. The two firms will collaborate in developing security solutions and custody services.
Increase in Trading Activity
Despite the impact of the collapse of Terra trading activity in South Korea has been increasing over the recent months. As an example, during 2023 Upbit, the biggest exchange in the country, has recorded high trading volumes.
An increase in gaming activity
Presentations during the 2023 Korea Blockchain Week (KBW) showed a surge in gaming activities in South Korea. As an example, Neowiz, a local game publisher, announced that through its Web3 arm, IntellaX, will develop some games on the Avalanche blockchain. A large passionate gaming community in the country has led to increased interest in developing blockchain games.
Impressive Technological Improvements
The technology that facilitates the development of web3 in Korea has continued to improve. Such infrastructure includes high speed internet services, IT infrastructure as well as research and development centres.
Both private and public institutions in the country such as universities and colleges have been collaborating to explore possible applications of the blockchain technology in various sectors like finance, health and supply chain.
Education in Crypto and Community Involvement
The country also witnessed an increase in cryptocurrency education and advocacy. Different communities, projects and platforms have been conducting online seminars, courses and conferences to teach individuals about cryptocurrency and blockchain technology. There are also various online communities for blockchain enthusiasts like developers, traders and investors in general.
Key Players Driving South Korea’s Digital Revolution
As said, different players like investors, developers, crypto exchanges and banks are active in the country’s digital sector. There is no doubt that crypto exchanges are playing a significant role in the development of Korean crypto.
Coinone, Upbit, Bithumb, Gopax and Korbit are the leading cryptocurrency exchanges in South Korea that are offering diversified crypto portfolios and have expanded the Korean crypto market size. However, Upbit has a monopoly in the country as it handles around 75% of the total cryptocurrency trading volume.
Traditional Banks Increase Participation in the Crypto Sector
Many banks are now participating in crypto projects through partnerships with crypto fin-tech and gaming companies. Nonetheless, it is important to note that internet-only banks in Korea such as K Bank, KakaoBank and Toss Bank are heavily involved in blockchain activities through active partnerships.
As an example, K Bank has partnered with Upbit and Mirae Asset Securities while KakaoBank recently formed a partnership with Coinone. With the current development in the blockchain sector more banks are likely to take part in coming months or years.
Increase in Web3 Gaming Activity
Probably, the blockchain based gaming sector has shown greater growth than most digital sectors in the country. During the 2023 Korea Blockchain Week (KBW) conference home based gaming projects pitched their developments in the Metaverse as well as in the blockchain gambling and gaming sectors. Most of these local crypto firms have developed their protocols on Ethereum, Cosmos and Solana blockchains. Read also about NFT in Blockchain in Korea
Also, some of the major game development and publishing companies like Com2us, Neopin, Neowiz, NCSOFT, Kakao Games and Netmarble have released different play-to-earn (P2E) games.
Looking at the market capitalization of major gaming platforms like Com2uS (KRW 832.5 billion) Kakao Games (KRW 3.69 trillion), WEMADE (KRW 1.96 trillion), Neowiz (KRW 816.3 billion), Nexon (KRW 1.23 trillion) and NCSOFT (KRW 10.14 trillion) we see an emerging well-funded gaming sector in South Korea.
South Korea Crypto Regulation
South Korea is one country that has a well-developed and proactive crypto regulatory framework. It has struck a balance between consumer protection and fostering innovation in the blockchain sector.
First, it has implemented comprehensive measures to combat money laundering, promote transparency and enhance security of cryptocurrency exchanges.
For example, all Virtual Asset Service Providers (VASPs) which offer services like crypto transfers, trading, custody and administration should register with the government. As a result, the Financial Supervisory Service of South Korea (FSS) supervises them.
Although the country approves ownership, holding and transfer of digital assets such as cryptocurrencies, the individuals should use their real bank accounts to buy them. In this case, both the dealers and the banks should verify such details. Again, the users should use their real names when creating their accounts on crypto exchanges and other DeFi platforms.
Cryptocurrency exchanges and other DeFi platforms should adhere to the required anti-money laundering/know-your-customer (AML/KYC) procedures. Similarly, they must have certificates from the Korea Internet & Security Agency for Information Security Management (KISA) that certify their security preparedness
In addition, banks with crypto exchange accounts should provide detailed timely reports to the Financial Services Commission (FSC). Having said all these, it is clear that South Korea legally allows ownership, transfer and trading of digital assets like cryptocurrencies.
Conclusion
The current developments in the blockchain sector in South Korea shows that individuals and institutions still have much interest in cryptocurrencies despite the controversy surrounding the collapse of Terra in 2022. There has been an increase in blockchain based gaming development and related activities. This is because the South Korean government allows ownership and transfer of digital assets like cryptocurrencies.
FAQs about Crypto in South Korea
Is crypto legal in South Korea?
Cryptocurrency is legal in South Korea as individuals can buy, hold and transfer them. However, to buy and trade cryptocurrencies in the country individuals should use their bank accounts and real names when registering on cryptocurrency exchanges.
Is crypto popular in South Korea?
Cryptocurrency is very popular in South Korea since it has large crypto exchanges like Upbit, BitHumb, CoinOne, Korbit, and Gopax. It also has proactive crypto regulations that protect both consumers and cryptocurrency businesses. Further, there is much education and advocacy on cryptocurrencies and other digital assets like non-fungible tokens.
What is the name of Korean cryptocurrency?
Bitcoin is the most popular cryptocurrency in South Korea, although people can trade other tokens and coins. In the meantime, South Korea is in the process of developing its own central bank digital currency (CBDC).
What is the most popular cryptocurrency in South Korea?
Most people in South Korea buy, hold and trade Bitcoin. South Korea is the second country where bitcoin is traded in large amounts. The number one country where bitcoin is traded the most is the United States.
