[Exclusive] 'Money Move' in Coins Doubles from 5 Trillion to 10 Trillion Won in a Year

Deposits Surge at Top 5 Domestic Exchanges

Upbit 7.7 Trillion, Bithumb 2.5 Trillion in Order

Funds Fleeing Deposits Due to Interest Rate Cuts

Deposits at domestic cryptocurrency exchanges have more than doubled over the past year, surpassing 10 trillion won. As the base interest rate decreases, funds are fleeing deposits and flocking to the cryptocurrency market.

According to data from the Financial Supervisory Service obtained by Korea Economic Daily from Park Sang-hyuk of the Democratic Party of Korea, deposits at the top five domestic cryptocurrency exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—amounted to 10.6561 trillion won as of the end of last month. This is a 104.32% increase compared to January last year (5.2154 trillion won). Deposits refer to funds held in accounts linked to cryptocurrency exchanges, indicating a high demand for cryptocurrency investment.

The influx of funds into the cryptocurrency market began after the U.S. presidential election last November, as the global cryptocurrency market entered an upward phase. With interest rates falling, funds leaving banks are accelerating the 'money move' into the cryptocurrency market. Disappointed by low interest rates, funds are leaving banks en masse. Last month, deposits at the top five commercial banks decreased by 5.746 trillion won compared to the previous month. At the end of last year, more than 20 trillion won in large sums exited deposits.

Considering this, approximately 26 trillion won has left banks in the past two months. At the end of last year, more than 20 trillion won in large sums exited deposits.

If corporate investment in virtual assets is allowed as early as next month, another large-scale money move is expected. Currently, the banks partnered with cryptocurrency exchanges for real-name accounts are K Bank (Upbit), NongHyup Bank (Bithumb), Kakao Bank (Coinone), and Shinhan Bank (Korbit).

Bithumb will partner with KB Kookmin Bank starting next month. There is speculation that significant money moves between banks will occur as corporate investment intensifies.

Park stated, "As the influx of funds into the virtual asset market is confirmed, strict monitoring of unfair trading practices in the market is necessary," adding, "The second phase of legislation for investor protection must also be expedited."

Reported by Park Jae-won and Jo Mi-hyun, mwise@hankyung.com