Author: Tiger Research

Compiled by: Deep Tide TechFlow

Deep Dive: The South Korean crypto market is undergoing a power shift. The era of retail investor dominance is ending, and traditional financial institutions, even before regulations are fully clear, have begun a frantic scramble for key infrastructure such as STO standard-setting rights, stablecoin payment channels, and the custody market. Behind this seemingly calm MOU competition lies a struggle for control of the future front-end of digital asset finance—whoever controls these infrastructures controls the customer gateway for the next decade.

Partnerships and equity acquisitions between South Korean institutions and securities firms are accelerating in tandem with the crypto market. However, the overall landscape remains unclear. Numerous partnerships have been announced, but actual commercial deployments are still rare. This report explores why conversion rates are so low and why institutions continue to pursue these opportunities.

Key points

South Korean institutions' crypto activities have moved beyond the MOU (Memorandum of Understanding, referring to a cooperation intention) stage and entered into specific business operations and exchange equity acquisitions.

Institutions are secretly intensifying competition for key financial infrastructure, including STO standard setting, stablecoin payment tracks, and custody markets.

Domestic infrastructure builders are becoming a core pillar of institutional business, building a domestically developed system that complies with the Bank of Korea's CBDC framework and local regulatory requirements, thereby reducing reliance on foreign technology.

The Web3 Foundation's strategy in South Korea has completely shifted from building retail communities to partnering with large corporations and financial institutions, as traditional finance is rapidly taking over the market.

1. MOU Arms Race

The diagram above, compiled by Tiger Research, illustrates the connections within the South Korean institutional crypto landscape. However, this structure is not easily understood at a glance. It's difficult to distinguish which lines represent active business operations and which are merely MOUs; the lines between central hubs and peripheral participants remain blurred.

It's worth noting that this complexity accurately reflects the current state of the South Korean institutional crypto market. As confirmed by Tiger Research's dataset—150 institutions and 196 partnerships—no single hub has achieved dominant control of the market.

Domestic institutions are establishing their position in the market while the regulatory landscape becomes fully clear. Competition currently unfolds on three fronts: stablecoins, STOs (security token offerings), and custody (storage of crypto assets).

Also noteworthy is the continued acquisition of stock exchange shares by financial institutions, a move interpreted as a confidence-driven attempt to gain a foothold before regulations become fully clear.

2. Battle for Stock Exchange Control

Less than 10 days after Hana Bank announced its acquisition of a 6.55% stake in Upbit operator Dunamu for approximately 1 trillion won (about $720 million), Hanwha Investment & Securities approved an additional 3.90% acquisition. On May 28th of the same month, Samsung Securities, Samsung SDS, and Samsung Card jointly announced a 4.0% acquisition. Mirae Asset Consulting had already signed an agreement in February to acquire a 92.06% stake in Korbit, and reports also indicate that Korea Investment & Securities and the global exchange OKX are in discussions regarding a joint acquisition of Coinone.

This competition reflects a revaluation of crypto exchanges, which are now seen not just as trading fee platforms, but as key customer touchpoints for distributing stablecoins, custody services, security tokens, and RWA products.

Banks and securities firms have gained indirect access to licenses such as VASP registration, while simultaneously securing the exchange's user base and liquidity. The current battle for control is ultimately a race to control the financial front end of digital assets.

3. South Korea's Crypto Market by Industry Segmentation

An industry-by-industry analysis of the relationship graph reveals an uneven landscape. Custody services are the most active, with many participants already operating live services after regulatory hurdles were cleared. In contrast, RWAs and STOs remain largely at the contract or MOU stage, awaiting the enactment of relevant legislation. Stablecoins face similar stagnation, with no clear standard setter in a position to dominate the market.

Because the nature of barriers differs across industries, the strategies for overcoming them also differ. Some players are consolidating domestic alliances, awaiting regulatory liberalization. Others are turning to overseas markets where regulatory progress is faster, exploring alternative pathways. The following sections explore the specific barriers and player strategies for each industry.

3.1. RWA/STO: Legislation has been passed, but commercial infrastructure remains a bottleneck.

The domestic STO market is divided into two camps: the alliance led by KOSCOM and the fragmented investment alliance led by Shinhan Investment & Securities. Mirae Asset Securities has taken an independent path, utilizing overseas operations instead of waiting for domestic infrastructure.

KOSCOM, a core financial network operator 76.6% owned by the Korea Exchange, is pursuing a neutral infrastructure model aligned with its founding mission, providing shared infrastructure for securities firms. Instead of signing exclusive agreements with individual issuers, it integrates 11 securities firms onto its platform, aiming to establish technical standards for issuance and distribution and ensure interfaces compatible with Korea's comprehensive securities depository and custody management requirements.

Shinhan Investment & Securities has rapidly built its own STO ecosystem. Starting with a proof-of-concept with Lambda 256 in 2022, it launched the joint platform PULSE in 2024 and officially launched its multi-platform account integration service in 2025. In 2025 alone, it participated as an account manager in 10 STO securities offerings and acquired a controlling stake in the OTC exchange NXT, establishing an end-to-end pipeline from issuance to distribution within its own ecosystem.

Mirae Asset Securities has completely bypassed domestic infrastructure development, going directly overseas. It issued digital bonds in Hong Kong, obtained a digital asset retail license from the Hong Kong Securities and Futures Commission, and plans to launch an MTS (Medium-Term Servicing System) for retail investors in June. In the US, it is the only Korean securities firm to join the DTCC-led tokenization working group, which includes JPMorgan Chase, Goldman Sachs, and BlackRock, participating in discussions on global standards development. This strategy gives Mirae Asset an advantage in regulatory compliance and negotiating leverage when its domestic STO infrastructure eventually aligns with global standards.

3.2. Stablecoins: Legislation, not technology, is the bottleneck.

The stablecoin market has a more diverse range of participants than other industries. Card companies, exchanges, fintech companies, and infrastructure companies have all entered the market through different routes, leveraging their respective strengths.

The largest group is the Kakao Group. Kakao, KakaoBank, and Kakao Pay have formed a joint working group to build a "super wallet" covering stablecoins, cryptocurrencies, and native currencies. Their key asset is the infrastructure they've built since operating the Kaia blockchain since the Ground X era. Kaia has already deployed Tether (USDT) on its network and is conducting real-time payment tests.

Shinhan Card is focused on migrating its existing payment network to the blockchain. Shinhan Card signed an MOU with Solana in April, although groundwork on the technology preceded the agreement. The company has already completed initial proof-of-concept work with Solana, Visa, Mastercard, and Fireblocks, and is now conducting advanced testing in six areas, including wallets and smart contracts.

Exchanges are circumventing delays in the development of Korean won stablecoins by using USD stablecoins. Dunamu is developing a Korean won stablecoin business based on its proprietary blockchain GIWA in partnership with Naver Financial. Bithumb, facing regulatory delays in Korean won stablecoins, has opted to secure its USD stablecoin distribution network first through partnerships with Circle and WLF. A joint Korean won stablecoin plan with Toss is also under discussion, although progress has been slow.

All camps are active, but all face the same regulatory hurdles. The Bank of Korea is pushing for the 51% rule, requiring only consortia with a majority of banks to be allowed to issue stablecoins, while fintech companies are vying for access, delaying government-ruling party negotiations. Once issuance guidelines are released, the camp with the most comprehensive public reach is expected to gain market leadership.

3.3. Custody: Requires more institutional capital.

The custody market is structurally simpler than other industries. The four major custody institutions have each secured domestic and international financial and technology partners to establish their market positions.

KODA was jointly founded by KB Kookmin Bank, Hashed, and Haechi Labs, combining traditional financial capital with crypto-native VC. Hanwha Investment & Securities, IBK Capital, and Kyobo Securities subsequently joined as investors, and its stability was further enhanced by a dedicated escrow insurance agreement with Samsung Fire & Marine Insurance.

KDAC is a traditional financial institution-dominated custodian bank, with Shinhan Bank and NH Nonghyup Bank as major shareholders. NH Nonghyup Bank was initially an investor in another custodian bank, Kardo, and became a shareholder of KDAC after the merger. Following the merger, KDAC's shareholders include two of South Korea's five largest banks.

BDACS employs a unique approach centered on technology and partner development. Expanding its custody and payments infrastructure through partnerships with Woori Bank and international digital asset infrastructure companies including Galaxy and GK8, it has also signed an MOU with Circle to issue the Korean Won stablecoin KRW1 on Circle's Arc blockchain and is the only VASP and key custody partner in the KRX-led KDX consortium. BDACS is currently conducting a proof-of-concept for KRW1, positioning itself as a custodian offering both custody and payments infrastructure.

BitGo Korea leverages the technological strength of its global parent company to enter the domestic market. Headquartered in Korea, BitGo manages over $70 billion in assets and handles approximately 20% of global Bitcoin on-chain transactions. Domestically, it is a custodian institution backed by financial and telecommunications capital, with Hana Financial Group and SK Telecom each holding stakes.

Various institutions entered the market through their respective custodian relationships. However, all major custodians reportedly suffered net losses last year, indicating that their development outpaced the institutional capital inflows needed to maintain operations.

In summary, the infrastructure development of STOs, stablecoins, and custody reveals a clear common constraint: domestic institutions have built the business framework, but the underlying technical infrastructure still largely relies on overseas solutions.

4. Infrastructure builders

Reliance on overseas solutions incurs structural costs: as the market grows, a significant portion of revenue will flow overseas in the form of technology licensing fees. Domestic infrastructure may also face disruption if overseas partners change policies or increase costs.

The more fundamental issue is that areas requiring integration with South Korea's specific regulatory environment—such as the issuance of Korean won stablecoins, STO distribution rules, and the integration of domestic corporate accounts—cannot simply be directly applied to global solutions. This is precisely why, once the relevant legislation is finalized and capital begins to flow seriously, domestic technology companies capable of directly designing and controlling the underlying mechanisms within the South Korean regulatory framework will be indispensable.

Domestic companies that have identified this technology gap and are building specific financial infrastructure in South Korea are already taking action. Leading technology providers are listed below.

4.1. LG CNS

Among traditional IT service companies, LG CNS has the most distinctive stance. Since launching its own blockchain platform "Monachain" in 2018, it has provided services to more than 220 local governments through the Korea Mint's local currency platform, accumulating operational experience.

This experience with permissioned blockchains has translated into orders for CBDC and STO projects. As the prime contractor for the Bank of Korea's CBDC project "Han River," LG CNS is developing a government subsidy distribution system utilizing deposit tokens. Through this process, it has established the system architecture capability to run institutional CBDCs and private digital currencies on a single network, effectively migrating traditional financial security standards and procedures to the blockchain.

The development of the KOSCOM joint STO issuance platform and the Mirae Asset Securities STO platform follows the same logic. LG CNS is not directly issuing assets, but rather targeting three areas: building issuance and distribution platforms for banks, providing SaaS to payment operators including credit card companies, payment gateways, and simple payment services, and developing digital asset payment platforms for securities firms. Once the regulatory framework is finalized, it appears to be the most likely candidate to capture the infrastructure contract market.

Among blockchain infrastructure companies, DSRV stands out for directly helping financial institutions access on-chain infrastructure. As a validator and infrastructure company operating on more than 70 blockchain networks, DSRV manages over 4 trillion won (approximately US$2.9 billion) in assets, ranking first in Ethereum staking in South Korea and among the top ten globally.

A key development is its expansion from node operations to a full-stack institutional on-chain infrastructure. Through the DSRV Portal, financial institutions can access wallet, payment, tokenization, custody, and staking capabilities via APIs and dashboard interfaces. Financial companies can access user wallets, institutional wallets, recurring payments, token issuance, burning, transfers and locking, custody, and staking capabilities without having to build their own nodes and security infrastructure.

Trust mechanisms are also in place. DSRV has taken the lead in obtaining VASP, ISMS, and SOC 1 Type 1 certifications, directly meeting the regulatory, security, and operational control requirements of financial institutions. In effect, this means that external infrastructure providers have taken on the wallet security, internal control, and operational risks that financial companies find most burdensome when deploying on-chain services.

Its partnerships are geared towards building payment infrastructure. DSRV is collaborating with SBI Ripple Asia to develop remittance infrastructure compliant with South Korean and Japanese regulations. It is partnering with Circle to develop an institutional USDC issuance, redemption, and settlement framework that bypasses exchanges. It has signed an agreement with BC Card to connect traditional card payment networks to a stablecoin payment infrastructure on the blockchain.

DSRV recently completed a 30 billion won (approximately US$21.7 million) Series B funding round to accelerate technology development.

4.2. Altus (formerly B-Harvest)

Altus (formerly B-Harvest) operates as an integration layer between legacy systems in financial institutions and blockchain environments. Founded in 2018, the company has contributed to the development of EVM chains based on the Cosmos SDK and is an organization of more than 40 engineers and researchers who have directly built multiple production networks including Canto, Crescent, Stable, and Ault.

Altus handles protocol engineering and core architecture for Ault Blockchain, an institutional L1 focused on RWA, transactions, and payments. In 2025, it contributed EVM integration, performance improvements, and security audits to Bitcoin staking L1 Babylon, enabling its production readiness.

Their solutions for financial institutions originate from the same layer. Altus built from scratch to meet the requirements of the financial industry: an on-chain and off-chain orchestration layer connecting legacy systems and blockchain execution environments, RWA tokenization, permissioned exchanges, stablecoin payments and settlements, and institutional wallets and custody infrastructure.

Current internal R&D is proceeding in parallel: the Canton Network architecture, which supports selective data disclosure between institutions, and the Commonware Stack, a modular blockchain framework with a target of 1 million TPS.

The three companies start from different positions and possess different strengths. LG CNS leads in financial IT trustworthiness, DSRV in blockchain validator infrastructure, and Altus in protocol-level custom design capabilities. However, all companies share the same goal: to acquire a core operating system before large-scale institutional capital inflows. The deciding factor is how much trusted building experience each company can accumulate before the market fully opens.

5. Retail investors exit, institutional investors enter.

The recent surge in partnership announcements should not be interpreted as ordinary business expansion. These are positioning maneuvers: institutions are securing advantageous arrangements before regulations are finalized, and then using these arrangements to influence the final form of the regulatory framework. The current competition for partnerships is less a market contest than a regulatory design process.

The South Korean cryptocurrency market has undergone a major restructuring in just six months. A custody alliance has formed, an STO consortium has taken shape, and major financial holding companies have taken steps to acquire exchange stakes. Meanwhile, retail trading volume has plummeted. The total trading volume of South Korea's five largest exchanges has decreased by approximately 48% year-on-year. The market focus is rapidly shifting from retail to institutional investors.

This shift has also changed how overseas crypto foundations approach South Korea. Just as Solana was adopted as a partner by Shinhanka and Avalanche by Mirae Asset, foundations entering the domestic market have shifted their primary focus from exchange trading volume to partnerships with financial institutions and large corporations. The community meet-and-greets model that once drove retail liquidity is no longer effective.

The results of this market restructuring are expected to be revealed at KBW 2026 in Seoul in September 2026, an event that consistently reflects mainstream market conditions. Looking at the confirmed speaker list, traditional finance professionals already make up the majority. While last year saw overseas foundations competing through token-incentivized community events, this year's focus is expected to shift towards substantive business discussions.

Tiger Research is the official research partner of KBW 2026.