Stablecoin balances in South Korea have fallen sharply since July even as stock inflows rise, underscoring a shift in where money is flowing.

The total amount of these so-called tokenized versions of fiat currencies held in wallets tied to South Korea’s five largest crypto exchanges have plunged 55%, with on-chain data pointing to a sharp wave of outflows triggered by the won’s break past 1,500 per dollar in mid-March.

Data from Allium Labs, tracking Ethereum and Tron wallets across Upbit, Bithumb, Coinone, Korbit, and GOPAX, shows that combined stablecoin holdings dropped from $575 million in July 2025 to roughly $188 million as of mid-March, with the decline accelerating as the won slid to 16-year lows against the dollar.

The timing suggests traders sold tether at elevated USD/KRW levels after the won weakened past 1,500 per dollar in mid-March, a threshold not seen since the 2008 financial crisis.

The weaker currency amplified the incentive to exit dollar-denominated holdings, with traders converting into won and redeploying into domestic assets, according to DNTV Research founder Bradley Park.

The outflows mark the latest phase of a broader migration of Korean retail capital from crypto into equities, a shift CoinDesk first documented in November. But where that earlier rotation was driven largely by narrative, with traders chasing AI-linked chipmakers as altcoin momentum faded, the latest drawdown appears tied to a specific FX trigger rather than a change in risk appetite.

South Korea’s government has since intensified efforts to attract capital into domestic markets through new policies such as “repatriation” accounts that offer up to 100% capital gains tax exemptions for investors who sell overseas assets and reinvest locally.

That shift is visible in brokerage data. Investor deposits, a proxy for cash available to buy stocks, fell from roughly ₩131 trillion ($86 billion) in early March to around ₩112 trillion ($74 billion) following the mid-month currency move, indicating that capital was being actively deployed into equities as stablecoin balances declined. Deposits have since begun to stabilize, suggesting fresh inflows are replenishing the pool of buying power.

The KOSPI, already up 75% in 2025, has gained another 37% this year, making it the world’s best-performing major index. The rally is highly concentrated, with Samsung Electronics and SK Hynix accounting for roughly half of market capitalization and more than 50% of projected profits, positioning them as the primary destination for both retail and institutional flows.

Broader stablecoin transaction volumes across Asia have ticked up over the last year, according to data from Artemis, suggesting the drawdown on Korean exchanges reflects domestic capital rotation rather than a region-wide pullback.

For crypto markets, the shift underscores the loss of one of their most important retail liquidity pools.

Korean participation has historically amplified market cycles, and the data now shows capital is not sitting idle but being actively redeployed. Whether those flows return may depend less on crypto narratives than on the sustainability of Korea’s equity rally.

A sharp correction, particularly in a market so concentrated in semiconductor stocks, could quickly force capital to rotate again. KOSPI has come under pressure recently as disruptions in oil transits through the Strait of Hormuz has sparked energy supply concerns.

Banks are increasingly testing tokenized deposits as a practical way to move traditional commercial bank money onto blockchain-based payment and settlement rails. A new report from the real-world asset data platform RWA.io, with input from UK Finance, Citi, BNY, JPMorgan’s Kinexys, Standard Chartered, ABN Amro and Digital Asset, argues that tokenized deposits are emerging alongside stablecoins and central bank digital currencies as part of a broader on-chain cash stack for the financial system.

Tokenized deposits are digital representations of ordinary bank deposits on blockchain or other distributed ledger infrastructure. Unlike many stablecoins, they are direct liabilities of the issuing bank and remain governed by existing banking frameworks, including deposit insurance, capital requirements and anti-money laundering and know-your-customer rules. The report highlights a growing slate of pilots and deployments across Europe as banks seek to preserve their role in payments, treasury and deposit-taking amid a proliferation of digital cash instruments.

The report notes visible momentum in Europe, anchored by recent public pilots. In January, Lloyds Banking Group and Archax announced they completed the UK’s first public blockchain transaction using tokenized deposits on the Canton Network. Separately, UK Finance’s Great British Tokenised Deposit pilot is examining person-to-person marketplace payments, remortgaging and digital-asset settlement with a target to advance through mid-2026.

The broader narrative is that banks are trying to reposition themselves at the center of digital money flows as tokenized forms of cash multiply and new settlement rails emerge. The two-tier monetary-ecosystem picture that underpins these efforts is a key theme of the report and a reminder that commercial bank money continues to underpin everyday payments even as the frontier of digital assets expands.

Tokenized deposits as a middle ground in the stablecoin, CBDC debate

UK Finance frames tokenized deposits as a vital bridge in a future “multi-money” ecosystem. In their view, tokenized deposits will sit alongside privately issued stablecoins and, potentially, central bank digital currencies, offering a framework in which traditional bank money can operate on new digital rails while preserving regulatory protections and consumer safeguards.

“Bringing that money onto digital rails will underpin the next generation of digital finance,” said Marko Vidrih, co-founder and chief operating officer at RWA.io. “For that reason, it is important to understand how tokenized deposits fit within the broader digital money ecosystem alongside stablecoins and CBDCs.”

ECB advances digital euro work, building tokenized money rails

The policy backdrop in Europe is advancing in parallel. The European Central Bank is expanding its digital euro program as private and public digital money compete for cross-border and domestic use. The ECB has opened applications for experts to contribute to workstreams on how a digital euro would function across ATMs, payment terminals and acceptance infrastructure, with plans to begin a 12-month pilot in the second half of 2027.

In March, the ECB unveiled Appia, its long-term blueprint for tokenized markets in Europe that would work with central bank money. A core element of Appia is Pontes, a new settlement mechanism designed to connect blockchain-based platforms to the Eurosystem’s payment infrastructure. The existing framework, TARGET Services, already processes large-value euro payments, securities settlements and instant payments across Europe. Pontes is scheduled to launch in the third quarter of 2026, with feedback from Appia’s consultation guiding broader tokenized-finance framework decisions for Europe.

These developments come as policymakers seek to balance innovation with safety, and as banks, fintechs and custodians explore how tokenized assets and on-chain settlement fit within existing regulatory and supervisory regimes.

For market participants, the implication is clear: tokenized deposits could serve as a practical on-ramp for institutions anchored in traditional banking to participate in the digitized economy without abandoning their regulated foundations. The combined push—from UK pilots to European rails—highlights a trend toward interoperable, regulated on-chain money that preserves the institutional protections that users rely on today.

As the ecosystem evolves, investors and users will be watching how these rails interact with private-stablecoin ecosystems, CBDC pilots and cross-border settlement standards. The success of tokenized deposits will hinge on risk controls, interoperable settlement timelines, and the readiness of banks to scale these pilots into durable, insured, compliant products that can operate alongside existing payment networks.

What remains uncertain is how quickly regulators will align around clear standards for tokenized deposits, what coverage and insurance will apply at scale, and how liquidity and settlement finality will be ensured across heterogeneous blockchain rails. Yet the convergence of bank money with tokenized infrastructure marks a notable shift in the trajectory of digital finance, one that could influence how institutions price, manage and settle money in a world where digital and traditional money increasingly coexist.

Readers should watch the next phase of UK pilots and the European rollout of Appia and Pontes for concrete milestones on settlement timings, interoperability tests and regulatory clarity that could determine whether tokenized deposits become a standard feature of the financial system, or a pioneering set of pilots with limited upside outside controlled environments.

Strategy executive chair Michael Saylor has hinted that his company bought more Bitcoin despite a market tumble over the weekend that has now pushed his company’s Bitcoin bet into a 10% loss. 

“The Orange March Continues,” Saylor posted to X on Sunday, alongside a chart showing Strategy’s roughly $52 billion worth of Bitcoin (BTC) purchases since August 2020. 

Saylor often posts the chart as a signal that his company has bought, or plans to buy more Bitcoin and it is often seen as a bullish signal for investors. 

The potential buy would add to Strategy’s larger-than-usual Bitcoin purchases this month, including 17,994 Bitcoin on March 9 and 22,337 Bitcoin on March 16, amounting to $2.9 billion in Bitcoin. 

It also comes amid heightened military tensions between US and Iran, causing fears of a prolonged energy and oil crisis. 

Bitcoin fell 4% to $67,725 on Sunday before partially recovering to $68,100 at the time of writing.

With Strategy’s average cost per Bitcoin at around $75,696, the company is currently down more than 10% on its Bitcoin bet, according to BitcoinTreasuries.

Strategy had been funding much of its Bitcoin purchases through high-yield perpetual preferred stock offerings — such as Stretch (STRC) — giving investors monthly dividends while the company grows its Bitcoin treasury without diluting MSTR common shares. 

However, it halted funding through STRC last week after failing to raise fresh capital from the preferred stock.

MSTR back in the red after short-lived rally

Strategy (MSTR) shares fell 6.6% last week to $135.66, erasing some of the double-digit gains they made earlier in the month, Google Finance data shows.