Crypto rally drives surge in South Koreans’ offshore disclosures
Fueled by a crypto rally and higher overseas stock balances, South Korea’s National Tax Service (NTS) reported a sharp jump in disclosures of offshore accounts. On Aug. 26, the agency said 6,858 taxpayers declared overseas financial accounts this year, with a combined balance of 94.5 trillion won ($67.6 billion), up 38.3% in filers and 45.6% (29.6 trillion won or $21.2 billion) in value from last year.
Crypto gains drive offshore filings
Within that, reports of overseas bank deposits and cryptocurrency accounts rose to 46.4 trillion won ($33.2 billion) this year, more than 12% above 2024. That figure excludes stock accounts, which alone totaled 48.1 trillion won ($34.4 billion). Tax officials attributed the increase largely to the surge in crypto prices and higher balances in overseas stock holdings. The trend is underscored by CoinMarketCap data: the crypto market cap now stands roughly at $3.87 trillion, up 86% from $2.08 trillion a year ago.
By asset type, the largest share of filers reported overseas bank deposits (3,197 people), followed by cryptocurrency (2,320) and stocks (1,992). By value, stock accounts dominated with 48.1 trillion won ($34.4 billion), compared with 23.5 trillion won ($16.8 billion) in bank deposits and 11.1 trillion won ($7.94 billion) in cryptocurrencies.
Korean law requires residents and domestic corporations to disclose foreign financial accounts if their combined balance exceeds 500 million won ($358,000) on any month-end date during the year. Reports must be filed with the local tax office by June of the following year.
The NTS said it will step up enforcement against suspected non-filers, using cross-border information-exchange data to verify offshore holdings. Penalties will include administrative fines, penalty notices, criminal referrals, public naming of violators and the collection of back taxes. The agency added that it is preparing to share crypto transaction data under the OECD’s Crypto-Asset Reporting Framework (CARF) and urged anyone subject to the rules to promptly file amended or late reports for overseas crypto accounts.
The recent bullish sentiment in crypto, which fueled the uptick in foreign financial disclosures, has also been driving public interest in digital assets and boosting expectations for altcoins. A survey by CoinNess and Kratos conducted between Aug. 18 and 22 with 2,000 respondents found that 38.5% expect a limited bull run in a handful of altcoins, either with strong real-world use cases or serving as the underlying assets of launched ETFs. Another 28.5% predicted gains would remain centered on Bitcoin and Ethereum, while 20.7% anticipated a broader altcoin season reminiscent of past cycles. The remaining 12.3% forecast the end of the rally and the start of a downturn.
Won stablecoins: policy and risks
Policy momentum around stablecoins is also picking up in South Korea. The Financial Services Commission (FSC) plans to introduce a bill in October governing won-pegged stablecoins as part of the second phase of the Virtual Asset User Protection Act. The legislation is expected to set rules for issuance, collateral management and internal controls.
Amid these changes, companies are showing growing interest in launching won-based stablecoins. Kaia, an EVM-compatible, layer-1 blockchain, recently signed a memorandum of understanding (MOU) with blockchain solutions provider Open Asset to collaborate on projects tied to Korean won–backed stablecoins. The partnership will focus on issuance, distribution, service launches and developing practical use cases.
Circle President Heath Tarbert has recently joined calls for a won-backed stablecoin. In an interview with The Korea Economic Daily, he underscored South Korea’s world-class payments infrastructure and said a digital won could help the country play a leading role in blockchain finance. Blockchain transactions, he noted, operate differently from traditional payment rails, making some form of digital currency, whether a stablecoin or a central bank digital currency (CBDC), a necessity.
Meanwhile, at a recent meeting with top executives from the country’s four major financial groups, Tarbert ruled out collaborations on won-denominated stablecoins. Instead, he promoted Circle’s dollar-pegged stablecoins and suggested exploring joint initiatives centered around them.
Not everyone sees stablecoins as a net positive. NICE Investors Service, a local credit rating agency, warned in a recent report that if banks issue won-based stablecoins, their interest income could suffer. The agency said adoption would likely weigh on banks, benefit securities firms and leave credit card companies largely unaffected. It added that a large shift of funds into stablecoins could shrink banks’ deposit base and weaken their intermediary role. Still, banks that issue stablecoins directly could soften the blow by tapping new fee-based revenue streams.
