South Korean Investors Choose Crypto-Linked Stocks Over US Big Tech: KCIF Report

Why have South Korea’s retail investors shifted their overseas portfolios from US big tech to virtual asset-related stocks? Especially those tied to stablecoins? According to a recent report by the Korean Center for International Finance (KCIF), brought to light by the Korea Times on 11 August 2025, the shift in investor emotions is largely based on the US GENIUS Act.

Interestingly, the share of crypto related names among the top 50 net-bought overseas stocks by Koreans jumped from 8.5% in January to 36.5% in June, before easing to 31.4% in July this year.

Furthermore, net purchases of the top seven US big tech stocks fell from a monthly average of $1.68 billion (January- April) to $440 million in May, $670 million in June, and $260 million in July.

South Korean investors are rapidly shifting from U.S. big tech stocks to <strong>stablecoin investments</strong>, driven by strong local regulations, the U.S. GENIUS Act, and upcoming KRW-backed stablecoin projects like Kakao Bank’s launch in 2023. This pivot highlights growing… pic.twitter.com/djPSTCS9ft

— Fama Crypto (@Famacrypt) August 11, 2025

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KCIF Attributes Rotation To Growing Interest In Stablecoin-Linked Equities

“Investments in virtual assets, particularly in shares related to stablecoins, have expanded following the passage of the US GENIUS Act,” the report said.

The report attributes the rotation to growing interest in stablecoin-lined equities after the US GENIUS Act established a regulatory framework enabling private-sector issuance of stablecoins, singed into law last month by US President Donald Trump.

Notably, South Korean investors have been interested in US equities as the domestic stock market has been languishing. However, the KCIF said, “Since June, the domestic stock market has outperformed overseas markets, while the local currency has strengthened, prompting individual investors to withdraw their investments from foreign markets.”

South Korea’s Political Heavyweights Square Off Over Stablecoin Bills

South Korea’s two largest political parties have taken center stage, unveiling rival stablecoin bills in the country. The prohibition of interest payments on stablecoins has become the most contentious issue in the stablecoin bills.

Lawmakers from both the ruling Democratic Party (DP) and the opposition People Power Party (PPP) introduced legislation in late July 2025 that could pave the way for won-backed stablecoins.

According to local news report published on 28 July 2025, “the ruling party believes that interest payments should be banned to prevent market disruption, while the opposition party believes that it is necessary to increase the competitiveness of won stablecoins.”

Each proposal reflects diverging philosophies on innovation, protection and monetary sovereignty.

Newly elected South Korean President Lee Jae-myung has openly advocated for stablecoins, and his administration has signalled that stablecoins will fill major gaps in the country’s financial landscape.

In his advocacy for stablecoins, Jae-myung has proposed the eligibility of companies with reserves as low as 500M won ($370,000) to be able to issue stablecoins.

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Key Takeaways

KCIF flagged lingering concerns around the US tariff scheme’s impact on the real economy, suggesting Korean retail investors are likely to remain cautious on overseas stocks near term.