Asia’s Crypto Landscape Shifts as Governments Tighten Control and Institutions Expand Adoption

TLDR:

• Crypto ecosystem in Iran hit $7.78B in 2025, with IRGC controlling over 50% of all inflows.
• Russia’s new law lets courts seize Bitcoin and virtual assets classified as intangible property.
• South Korea’s NTS accidentally leaked a seed phrase, leading to a suspected $4.8M crypto loss.
• Japan’s Progmat plans to migrate $2B in tokenized securities to Avalanche by end of June 2026.

Crypto activity across Asia reached new levels in early 2025, with governments and institutions responding in varied ways.

From Iran’s $7.78 billion ecosystem to South Korea’s stablecoin regulatory gaps, the region is shifting fast. Russia’s court-ordered confiscation law and Japan’s corporate Bitcoin purchases also mark major moves.

Together, these developments paint a clearer picture of where Asian crypto policy and adoption are heading this year.

Iran and Russia Reshape Crypto Through Government Control

Iran’s crypto ecosystem reached $7.78 billion in 2025, according to blockchain analytics firm Chainalysis. The country has built a parallel financial system centered on Bitcoin mining and stablecoins. This system allows Iran to operate outside the U.S. dollar framework.

Addresses linked to the Islamic Revolutionary Guard Corps accounted for over 50% of crypto inflows. The IRGC received more than $3 billion throughout the year. Iran’s central bank also accumulated at least $507 million in USDT, likely to stabilize the rial and settle trade.

Meanwhile, Russian President Vladimir Putin signed a law allowing courts to seize virtual currencies in criminal cases.

The law formally classifies virtual currencies as intangible assets. Law enforcement can transfer seized assets to designated safe addresses via hardware wallets.

South Korea and Japan Advance Crypto Frameworks at Different Speeds

South Korea’s National Tax Service accidentally exposed a hardware wallet seed phrase in a news photo. Blockchain data showed that around 4 million PRTG tokens were subsequently transferred. The estimated value of the transfer was approximately $4.8 million.

The Bank of Korea renewed its call for commercial banks to lead Korean won stablecoin issuance. The central bank warned that private issuance could pose risks to monetary policy and foreign exchange stability. It recommended prioritizing banks subject to capital and compliance regulations.

As South Korea delayed stablecoin rules, Tether and Circle moved to expand in the Korean market. Tether began recruiting local staff, including government relations and public relations roles.

Circle’s USDC also reached around 10% market share on South Korean crypto exchanges.

🇯🇵 Japan FSA announced support for private-sector AML crypto trials running March–May 2026. The project, submitted by Hitachi, involves exchanges, stablecoin firms, and blockchain analytics providers. — FSA Japan, Feb. 27

Japan and China Push Crypto Into Institutional and Legal Arenas

Japan’s Financial Services Agency announced support for anti-money laundering proof-of-concept trials in crypto. The trials are scheduled to run from March to May 2026. They will test an industry-wide wallet-sharing framework for suspicious activity monitoring.

Japan’s largest security token platform, Progmat, plans to migrate over $2 billion in tokenized assets to Avalanche.

The migration covers tokenized real estate and corporate bonds currently on the Corda platform. The Avalanche L1 integration is expected to complete by the end of June 2026.

In addition, Japanese listed company Daido Tokushu Metal announced board approval to purchase Bitcoin worth up to 1 billion yen.

The purchase is part of a mid-term management plan running through March 2029. The company cited Bitcoin’s limited supply and low correlation with traditional assets as key reasons.

China’s Supreme People’s Court also stated plans to study judicial responses to virtual currency cases. The court aims to strengthen financial judicial protections for new asset classes.

A report from Artemis and Stablecon placed China second in global stablecoin inflow volume, receiving around $71 billion monthly.