Even as the virtual asset market has generally slowed, the outflow of domestic stablecoins to overseas exchanges continues to show a steady increasing trend.

In particular, as overseas exchanges have expanded their offerings beyond virtual assets to include domestic stock-linked derivatives, analysts note that capital movement by domestic investors is accelerating.

[Courtesy of Jaegyeong Ilbo]

▲ Stablecoin Net Outflows Approaching Scale of Overseas Stock Investment

According to data submitted by the Financial Supervisory Service to Representative Lee Jong-wook of the People Power Party, a member of the National Assembly's Budget, Planning and Finance Committee, stablecoins shipped from South Korea's top five virtual asset exchanges to overseas exchanges totaled 2.7625 trillion won in June of this year.

During the same period, the amount flowing from overseas exchanges into South Korea was 2.2022 trillion won, recording a net outflow of 560.3 billion won.

This represents a considerable level when compared to the scale of net purchases of overseas stocks by domestic investors during the same month. Based on Korea Securities Depository and Clearing Corporation data, the net purchase amount for overseas stocks was approximately 722 billion won, with stablecoin net outflows reaching approximately 77.6% of that figure.

▲ Continuous Overseas Net Outflows for 18 Consecutive Months

The overseas outflow of stablecoins merits attention as it is not a temporary phenomenon but a long-term trend.

From the beginning of last year when related statistics began to be compiled through June of this year, outflows to overseas exchanges have exceeded inflows for 18 consecutive months, with net outflows persisting.

In the beginning of last year, stablecoin net outflows remained at around 20% of the scale of net purchases of overseas stocks, but recently, as the fervor for overseas stock investment has cooled somewhat while stablecoin outflows continue steadily, the relative proportion has increased significantly.

In particular, in the second quarter of this year, stablecoins experienced a net outflow of 1.6872 trillion won, while overseas stocks recorded net sales of 1.6185 trillion won instead, showing a stark contrast in the direction of capital movement.

▲ Expansion of Demand for Overseas Derivatives Investment

The market believes that a significant portion of the stablecoins flowing overseas is being used for derivatives trading that domestic exchanges do not offer.

Overseas exchanges are listing not only futures on virtual assets such as Bitcoin but also spot and futures products based on major domestic stocks such as Samsung Electronics, SK Hynix, and Hyundai Motor, pursuing domestic investor recruitment.

Additionally, by offering high-risk products that can leverage dozens of times, real-world asset tokens (RWA) based on dollars, decentralized finance (DeFi), staking services, and various other investment opportunities, the trend of increased use of overseas exchanges has been observed.

▲ Need to Improve Investor Protection System

Experts are concerned that as the use of overseas exchanges increases, the blind spots in domestic regulations and protective measures may expand.

Since overseas exchanges fall outside the direct supervisory scope of domestic financial authorities, procedures for investor compensation in case of damages may be limited.

Representative Lee Jong-wook pointed out that as the "coin move" from South Korea to overseas spreads, investors are being left defenseless against high-risk derivatives on overseas exchanges alongside capital outflows.

He further emphasized that the government must comprehensively re-examine the investor protection and management system and accelerate institutional improvements.