This article is written by Tiger Research. The South Korean cryptocurrency market is undergoing a power shift. The era dominated by retail investors is coming to an end, as traditional financial institutions have begun to frantically seize key infrastructures such as STO standard formulation, stablecoin payment rails, and custodial markets, even before regulations have become fully clear. Behind this seemingly calm race for MOUs is a struggle for control over the future financial front of digital assets — whoever controls these infrastructures will control the customer entry point for the next decade.

Partnerships and equity acquisitions between South Korean institutions and securities firms are accelerating in the cryptocurrency market. However, the overall landscape remains difficult to discern at a glance. Many partnerships have been announced, but actual business deployments are still rare. This report explores why the conversion rate is so low and why institutions are still pushing forward.

Key Points

• South Korean institutional cryptocurrency activities have surpassed the MOU (Memorandum of Understanding, referring to cooperation intentions, the same below) stage, entering specific business operations and exchange equity acquisitions.
• Institutions are secretly intensifying competition for key financial infrastructures, including STO standard formulation, stablecoin payment rails, and custodial markets.
• Domestic infrastructure builders are becoming the core pillars of institutional business, constructing a local track in compliance with South Korea's central bank CBDC framework and local regulatory requirements, reducing reliance on foreign technology.
• Strategies of overseas Web3 foundations entering South Korea have completely shifted from retail community building to cooperating with large enterprises and financial institutions, as traditional finance is accelerating its takeover of the market.

1. MOU Arms Race

The above chart, compiled by Tiger Research, illustrates the connections in the landscape of South Korean institutional cryptocurrency. However, this structure is not easy to discern at a glance. It is difficult to differentiate which lines represent active business operations and which are just MOUs, and the boundary between central hubs and peripheral participants remains blurred.

Notably, this complexity accurately reflects the current situation of the South Korean institutional cryptocurrency market. As confirmed by Tiger Research's dataset — 150 institutions and 196 partnerships — no single hub has achieved dominant control over the market.

Domestic institutions are establishing their positions throughout the market before regulations are fully clarified. Competition is currently unfolding along three lines: stablecoins, STOs (security token offerings), and custody (cryptocurrency asset storage).

It is also noteworthy that financial institutions are continuously acquiring equity stakes in exchanges, a move interpreted as driven by confidence to seize footholds before regulations are fully clarified.

2. Exchange Equity Scramble

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

This competition reflects a revaluation of cryptocurrency exchanges, which are now seen not only as trading fee platforms, but as key client touchpoints capable of distributing stablecoins, custodial services, security tokens, and RWA products.

Banks and securities firms have gained indirect access to licenses such as VASP registration, while ensuring the user base and liquidity of exchanges. The current equity scramble is ultimately a race about who will control the financial front of digital assets.

3. South Korean Cryptocurrency Market by Industry

An industry-by-industry analysis of the relationship diagram reveals an unbalanced pattern. The custody business operations are the most active, with many participants having launched real-time services after clearing regulatory obstacles. In contrast, RWA and STOs largely remain at the contract or MOU stage, waiting for related legislation to take effect. Stablecoins face similar stagnation, with no clear standard setters able to dominate the market.

Due to the different nature of barriers across industries, strategies for breakthroughs also vary. Some participants are integrating domestic alliances while waiting for regulatory openings. Others are turning to faster-moving overseas markets to explore alternative pathways. The following sections will explore the specific barriers and participant strategies for each industry.

3.1. RWA/STO: Legislation Passed, Commercialization Infrastructure is the Bottleneck

The domestic STO market is divided into two camps: the KOSCOM-led alliance and the fragmented investment alliance led by Shinhan Investment Corp. Future Asset Securities has taken an independent path, leveraging overseas business instead of waiting for domestic infrastructure.

KOSCOM is a core financial network operator, with the Korea Exchange holding a 76.6% stake in it, and it is pursuing a neutral infrastructure model in line with its founding mission, providing shared infrastructure for securities firms. It does not sign exclusive agreements with individual issuers but integrates 11 securities firms onto its platform, aiming to establish technical standards for issuance and distribution and ensuring compatibility with South Korea’s comprehensive custodial management requirements.

Shinhan Investment Securities quickly 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 plans to officially launch multi-platform account integration services in 2025. In 2025 alone, it participated as an account manager in 10 investment contract securities issuances and acquired a controlling stake in the OTC exchange NXT, establishing an end-to-end pipeline from issuance to distribution within its ecosystem.

Future Asset Securities has completely bypassed the development of domestic infrastructure and gone directly overseas. It issued digital bonds in Hong Kong, obtained a retail license for digital assets from the Hong Kong Securities and Futures Commission, and plans to launch a market retail investor-focused MTS in June. In the U.S., it is the only Korean securities firm to join the DTCC-led tokenization working group, which includes JPMorgan, Goldman Sachs, and BlackRock, participating in global standard-setting discussions. This strategy positions Future Asset advantageously in regulatory alignment and negotiation leverage when domestic STO infrastructure finally connects with global standards.

3.2. Stablecoins: Legislation Not Technology is the Bottleneck

Participants in the stablecoin market are more diverse than in other sectors. Card companies, exchanges, fintech firms, and infrastructure companies are entering through different routes, leveraging their respective strengths.

The largest camp is the Kakao Group. Kakao, KakaoBank, and Kakao Pay have formed a joint task force to build a "super wallet" covering stablecoins, cryptocurrencies, and local currencies. Their key asset is the infrastructure accumulated from operating the Kaia public chain since the era of Ground X. Kaia has already deployed Tether (USDT) on its network and is undergoing real-time payment testing.

Shinhan Card focuses on migrating its existing payment network to a blockchain track. Shinhan Card signed an MOU with Solana in April, despite the foundational work on the technology being done before the agreement. The company has already completed initial proofs of concept in collaboration with Solana, Visa, Mastercard, and Fireblocks, and is now undergoing advanced testing in six areas including wallets and smart contracts.

The exchanges' camp is circumventing delays in Korean won stablecoins through U.S. dollar stablecoins. Dunamu is developing a Korean won stablecoin business based on its proprietary blockchain GIWA in collaboration with Naver Financial. Facing regulatory delays for Korean won stablecoins, Bithumb has chosen to first secure a distribution network for U.S. dollar stablecoins through partnerships with Circle and WLF. A joint Korean won stablecoin plan with Toss is also under discussion, although progress is slow.

All camps are active but face the same regulatory barriers. The Bank of Korea is pushing the 51% rule, which requires that only alliances with a majority of banks will be allowed to issue stablecoins, while fintech companies are struggling for access, delaying government-party negotiations. Once issuance guidelines are released, the camp with the most comprehensive public touchpoints is expected to achieve market leadership.

3.3. Custody: More Institutional Capital Needed

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

KODA was co-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 later joined as investors, further enhancing its stability with a dedicated custodial insurance agreement from Samsung Fire and Marine Insurance.

KDAC is a custody institution led by traditional finance, with Shinhan Bank and NH Nonghyup Bank as major shareholders. NH Nonghyup Bank was initially an investor in another custodian, Kardo, and became a KDAC shareholder after the merger. After the merger, two of South Korea's five largest banks became shareholders of KDAC.

BDACS has taken a unique approach centered on technology and partnership development. By partnering with Woori Bank and international digital asset infrastructure companies including Galaxy and GK8 to expand custody and payment infrastructure, it has also signed an MOU with Circle to issue the Korean won stablecoin KRW1 on Circle's Arc blockchain, and it is the only VASP and key custodial partner in the KRX-led KDX alliance. BDACS is currently conducting a proof of concept for KRW1, positioning itself as a custodian targeting both custody and payment infrastructure.

BitGo Korea has entered the domestic market due to the technological strength of its global parent company. BitGo custodianship exceeds $70 billion in assets, processing about 20% of global Bitcoin on-chain transactions. Domestically, Hana Financial Group and SK Telecom each hold stakes, making it a custodian supported by financial and telecommunications capital.

Each institution has entered the market through its respective custody relationships. However, it has been reported that all major custodians incurred net losses last year, indicating that their construction is ahead of the institutional capital inflow needed to sustain operations.

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

4. Infrastructure Builders

Reliance on overseas solutions brings structural costs: as the market grows, a considerable portion of revenues will flow overseas in the form of technology licensing fees. If overseas partners change policies or increase costs, domestic infrastructure also faces the risk of disruption.

The more fundamental issue is that areas needing to integrate with South Korea's specific regulatory environment — such as issuing Korean won stablecoins, STO distribution rules, and integrating domestic corporate accounts — cannot simply apply global solutions directly. This is why, once related legislation is finalized and capital begins to flow seriously, domestic tech companies capable of directly designing and controlling underlying tracks according to the South Korean regulatory framework will be essential.

Domestic companies that have identified this technological gap and are building South Korea-specific financial infrastructure are already taking action. Leading technology providers are as follows.

4.1. LG CNS

Among traditional IT service companies, LG CNS stands out the most. Since launching its own blockchain platform "Monachain" in 2018, it has provided services to over 220 local governments through the local currency platform of the Korea Mint Corporation, accumulating operational experience.

This licensed chain experience translates to orders for CBDC and STO projects. As the main contractor for the Bank of Korea's CBDC project "Han River," LG CNS is developing a government subsidy disbursement system using deposit tokens. Through this process, it establishes the capability to operate institutional CBDCs and private digital currencies on a single network, effectively transplanting traditional finance's security standards and procedures onto the blockchain.

The development of the KOSCOM joint STO issuance platform and the Future Asset Securities STO platform follows the same logic. LG CNS does not directly issue assets but targets three directions: 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 secure infrastructure contracts.

Among blockchain infrastructure companies, DSRV stands out for directly helping financial institutions access on-chain infrastructure. As a validator and infrastructure company operating on over 70 blockchain networks, DSRV manages over 40 trillion won (approximately 2.9 billion USD) in assets, ranking first in Korean Ethereum staking and among the top ten globally.

A key development is its expansion from node operations to full-stack institutional on-chain infrastructure. Through the DSRV Portal, financial institutions can access wallet, payment, tokenization, custody, and staking functions via API and dashboard interfaces. Without building their own nodes and security infrastructure, financial companies can access capabilities for user wallets, institutional wallets, regular payments, token issuance, destruction, transfer and locking, custody, and staking.

Trust mechanisms are also in place. DSRV was the first to obtain VASP, ISMS, and SOC 1 Type 1 certifications, directly meeting the regulatory, security, and operational control requirements of financial institutions. In practice, this means that external infrastructure providers bear the burdens of wallet security, internal controls, and operational risks that financial companies face when deploying on-chain services.

Its partnerships are aimed at building payment rails. DSRV has developed remittance infrastructure compliant with Korea-Japan regulations in collaboration with SBI Ripple Asia. It’s also working with Circle to develop a framework for issuing, redeeming, and settling institutional USDC bypassing exchanges. A stablecoin payment infrastructure agreement has been signed with BC Card to connect traditional card payment networks to blockchain.

DSRV recently completed a Series B financing of 30 billion won (approximately 21.7 million USD) to accelerate technology development.

4.3. Altus (formerly B-Harvest)

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

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

Its financial institutional solutions are derived from the same layer. Altus builds from scratch according to financial industry requirements: an on-chain and off-chain orchestration layer connecting legacy systems and blockchain execution environments, RWA tokenization, licensed exchanges, stablecoin payments and settlements, and institutional wallet and custody infrastructure.

Current internal R&D is proceeding in parallel: supporting selective data disclosures between institutions through the Canton Network architecture, and a modular blockchain framework Commonware Stack targeting 1 million TPS.

The three companies come from different positions and have different advantages. LG CNS leads in financial IT credibility, DSRV leads in blockchain validator infrastructure, and Altus leads in protocol-level custom design capabilities. However, all companies share the same goal: to secure core operating systems before institutional capital flows in on a large scale. The deciding factor will be how much credible building experience each company can accumulate before the market fully opens.

5. Retail Exit, Institutional Entry

The recent surge in partnership announcements should not be interpreted as ordinary business expansion. These are positioning moves: institutions are seizing advantageous arrangements before regulations are finalized and then leveraging these arrangements to influence the final shape of the regulatory framework. The current race for partnerships is more about regulatory design than market competition.

The South Korean cryptocurrency market has undergone significant restructuring in just six months. The custody camp has formed, the STO alliance has taken shape, and major financial holding companies have acted to acquire equity stakes in exchanges. Meanwhile, retail trading volumes have declined sharply. The total trading volume of South Korea's top five exchanges has decreased by about 48% year-on-year. The market focus is rapidly shifting from retail to institutional.

This shift has also changed the way overseas cryptocurrency foundations approach South Korea. Just as Solana has been adopted as a partner by Shinhan Card, Avalanche has been adopted by Future Asset; foundations entering the domestic market have shifted their primary focus from exchange trading volumes to partnerships with financial institutions and large enterprises. The community meet-up model that once drove retail liquidity is no longer effective.

The results of this market restructuring are expected to be evident at KBW 2026, scheduled to be held in Seoul in September 2026, an event that always reflects mainstream market conditions. Looking at the confirmed list of speakers, traditional financial professionals are in the majority. Last year, overseas foundations competed through community peripheral activities incentivized by tokens, while this year’s focus is expected to shift toward substantive business discussions.

Tiger Research is the official research partner of KBW 2026.

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