South Korea is moving beyond its reputation for volatile retail crypto trading and positioning itself as a testing ground for institutional digital finance, according to Factblock chief executive and Korea Blockchain Week organiser Andrew Park.
For years, international observers viewed the country largely through the lens of the “Kimchi Premium” – a market in which highly active retail traders pushed token prices well above global averages. Park believes that picture is now changing as financial institutions focus less on speculation and more on custody, tokenisation, stablecoins, payments, settlement and regulation.
“A few years ago, global companies coming to Korea were mostly focused on tokens, exchanges, and market prices,” Park said. “Today, the questions are different. Global financial institutions and companies are asking about custody, tokenization, stablecoins, payment and settlement infrastructure, regulation, and how to enter the Korean market. I think the fact that the conversation itself has changed is an important signal that the nature of the market is changing as well.”
Park spent two decades in traditional finance before moving into Web3, holding senior positions at Seoul Guarantee Insurance, Woori Card, JPMorgan Chase, Visa and American Express. His experience across established finance and digital assets has given him a close view of the relationship developing between South Korea’s banks, companies and blockchain sector.
He says the most important evidence of the country’s evolution is not found in exchange volumes, but in the questions being asked by international companies in boardrooms.
Previously, global projects often regarded Seoul as a highly liquid market where they could list assets and sell them to retail investors. Now, banks, custodians and asset managers are increasingly examining South Korea as a jurisdiction suitable for enterprise-level digital asset deployment. The conversation has shifted towards legal compliance, institutional custody and access to the market – the foundations on which traditional capital markets operate.
Building the financial infrastructure
Park argues that institutional adoption will not be created by a single regulatory announcement or a sudden market rally. Instead, it will depend on resolving practical issues such as account access, custody, payments, settlement, accounting and compliance.
“Institutional markets are not created by one major announcement,” Park said. “They emerge when less glamorous issues such as account access, custody, payments and settlements, accounting, and compliance begin to get resolved one by one. In Korea, those foundations are now starting to move at the same time.”
Several policy initiatives are contributing to that process. The Financial Services Commission has outlined a framework that would open corporate virtual asset accounts to about 3,500 listed companies and registered professional investors.
The National Assembly has also formally passed amendments to the Electronic Securities Act and the Capital Markets Act. Those changes bring tokenised real-world assets and security tokens into a unified legal framework.
Meanwhile, the Bank of Korea has completed initial trials involving real-world deposit tokens as part of Project Hangang, preparing the ground for a second phase of institutional testing.
Rather than waiting for one comprehensive digital asset law, South Korea is attempting to create institutional liquidity by dealing with the less visible requirements of a functioning market. These include legally final settlement, clear accounting definitions and custody arrangements suitable for institutions.
Park’s experience at JPMorgan Chase, Visa and Samsung Card has also shaped his view of the differences between traditional banking and Web3. He says banks are often criticised as slow or technologically outdated, but their systems are designed around managing operational risks rather than simply processing transactions quickly.
“Crypto tends to misunderstand banks. Banks are not slow simply because they do not understand technology,” Park explained. “In traditional finance, what often matters most is not the 99% of transactions that work normally, but what happens in the remaining 1%. Who is responsible when fraud occurs? What happens when a payment fails? How are capital and liquidity managed? What must be reported to regulators? Those issues all have to be designed into the system.”
The digital asset industry, however, can also view traditional finance too narrowly. By concentrating on price volatility and market risk, established institutions may overlook the potential of 24-hour international settlement networks, programmable money and clearing systems powered by smart contracts.
Park believes the future will not be led solely by Web3 companies seeking to replace banks, or by conventional financial institutions that refuse to use public blockchains. Instead, he expects the strongest businesses to be those able to combine both systems while managing the crucial 1% of transactions that fail or require intervention.
AI and machine-to-machine payments
Park’s attention is now turning beyond tokenised securities and stablecoins issued by banks. He identifies the meeting point between artificial intelligence and programmable payment infrastructure as a potential next stage for South Korea’s digital finance market.
“What I am most interested in is the infrastructure required for a machine-to-machine economy, particularly an environment in which AI agents can transact and make payments autonomously,” Park said. “If an AI agent needs to pay another agent or a service, it needs a wallet and a payment method… In an environment where large numbers of AI agents purchase data, consume computing resources, and make small real-time payments, there may be areas where existing payment infrastructure becomes inefficient. That is one reason stablecoins and onchain payments could become important use cases.”
Early testing has already begun. During technical experiments linked to the Bank of Korea’s central bank initiatives, researchers used agentic AI models and wholesale deposit tokens to carry out automated transactions subject to predetermined conditions.
South Korea’s widespread high-speed internet access, strong digital literacy and significant investment in both Web3 infrastructure and artificial intelligence give it a strong base for further development.
The country’s next market shift, Park suggests, may therefore involve more than institutional traders buying digital assets. It could see autonomous software agents using blockchain settlement networks as their standard means of transferring value.
Separately, South Korea’s top court has drafted an amendment to civil execution rules that would establish explicit legal procedures for freezing, seizing and liquidating virtual assets.
