Cryptocurrency exchanges in South Korea are shifting their focus to dollar-pegged stablecoins as the demand grows following the increase in Won-Dollar exchange rate.
With the U.S. dollar gaining more strength over Won, investors have turned to stablecoins as a way to preserve value, prompting exchanges to adjust their old strategies.
The benchmark KOSPI index has climbed to new highs, alongside assets like gold and silver, cryptocurrency prices on the other hand have shown little to no momentum. As trading activity weakened, exchanges began focusing on dollar-denominated stablecoins as an alternative source of growth.
Last week, Korbit waived all trading fees for USD Coin (USDC), the dollar-pegged stablecoin issued by Circle. The exchange also launched a USDC trading campaign that would run till March in order to encourage higher participation.
Under the campaign, users who record a cumulative weekly trading volume of at least 10 million Won can share a total prize pool of 25,000 USDC, with allocations based on their individual trading volumes.
Coinone, another major exchange is running a similar promotion, distributing a weekly reward pool of 8,000 USDC to participants according to their trading activity.
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Upbit and Bithumb, South Korea’s largest crypto exchanges, have taken a different approach to expand thier stablecoin offering. The two exchanges listed USDe, also known as Ethena USD. And the two firms paired the new listing with promotional campaigns to increas trading volumes.
Since January 17, Upbit has been running a three-round event that offers Ethena tokens to users who rank among the top traders of USDe.
The renewed interest in stablecoins has been tied to movements in the foreign exchange market. As the Won continues to weaken against the dollar, there continues to be an increase in the use and trade of dollar-dominated stablecoins.
According to data from on-chain analytics firm CryptoQuant, when the Won-Dollar exchange rate exceeded 1,480 last Wednesday, Tether trading volume across South Korea’s five major Won-based exchanges reached 378.2 billion Won, which is a 62 percent increase from the beginning of the year.
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