East Asia’s cryptocurrency economy surpassed $1.2 trillion in 2026, with South Korea commanding the largest share at $449.1 billion, according to a new Chainalysis report. The analysis highlighted markedly different trends across South Korea, Japan, Hong Kong, China, and Taiwan as each market adjusted to regulatory, institutional, and retail dynamics.
Retail strength and AI-token surge in South Korea
South Korea’s digital asset market expanded by 12.3% compared to the previous period, reinforcing its status as a retail-driven powerhouse in the region. Exchange-related flows increased by $51.1 billion, reflecting sustained activity among individual investors.
Chainalysis identified a notable concentration on artificial intelligence–related cryptocurrencies in South Korea’s trading landscape. By June 2026, this segment emerged as the largest thematic category on local exchanges, with Worldcoin (WLD) alone driving $7.41 billion in volume. Other top-traded AI tokens included SAHARA with $3.2 billion, VIRTUAL at $2.7 billion, BIO at $2 billion, and NEAR with $1.7 billion.
AI-themed crypto assets made up a 19.5-times larger share of South Korean won-denominated trading compared to Japanese yen trading, underlining a unique market focus.
Chainalysis stated that retail demand in South Korea for AI-centric tokens created a trading profile distinct from other regional economies, with the thematic segment now outpacing other asset classes on Korean platforms.
Japan’s $228.3 billion crypto market showed different characteristics, with decentralized exchange (DEX) activity reaching 34.5% of total service flows. Retail traders increasingly moved funds into DeFi protocols, and the share of smart contract tokens in yen trading volumes rose from 10% to 15.4%.
Both South Korea and Japan saw crypto taxes playing a significant role. While Japan’s maximum marginal tax rate on crypto peaked at 55%, South Korea had not implemented any crypto profits tax during the period. However, South Korea plans to enforce a 22% crypto gains tax in 2027, while Japan passed reforms in July 2026 to move eligible gains to around 20% separate taxation.
Mini dictionary: Chainalysis, a blockchain analytics firm, is known for producing in-depth research reports on global crypto adoption, market trends, and illicit activity within digital assets.
| Country | Crypto Market Size | Main Trend | Crypto Tax Rate (Peak) |
|---|---|---|---|
| South Korea | $449.1B | AI-token, retail trading | 0% (22% in 2027) |
| Japan | $228.3B | DEX, retail + DeFi | 55% (shifting to ~20%) |
| Hong Kong | $192.2B | Institutional inflows | Varied |
| China | $176.3B | P2P stablecoin | Ban on crypto trading |
Hong Kong’s institutional dominance, China’s surge in P2P stablecoins
Hong Kong, with a $192.2 billion crypto economy, distinguished itself by institutional engagement. Institutional platforms accounted for 16% of service inflows, triple the proportion registered in neighboring markets. Major actors included custody providers, prime brokers, and market-making desks, which collectively represented 85% of the category.
Inbound service-to-service transfers in Hong Kong reached nearly $24 billion, while net business-to-business inflows grew to $17.4 billion by mid-2026.
China followed a starkly different path. Despite maintaining a ban on domestic crypto services, Chainalysis estimated Mainland China’s market at a minimum of $176.3 billion in 2026.
China’s crypto activity was dominated by domestic peer-to-peer (P2P) transactions, accounting for 59.1% of total market size. Unique wallets sending stablecoin transactions in China expanded 43-fold from the first quarter of 2024 to the second quarter of 2026. Monthly additions surged from around $240 million in March 2025 to close to $5 billion one year later.
Stablecoin holdings in China demonstrated unusually high turnover, circulating at a rate of 33.2 times per year—well above the global average of 9.3 times. Chainalysis suggested that these trends may be influenced by the country’s expanded social credit system, although this remains a working hypothesis.
Chainalysis emphasized the remarkable diversity across East Asia, noting that South Korea’s retail and AI-token focus, Hong Kong’s institutional flows, Japan’s rising DeFi participation, and China’s P2P stablecoin volumes reflect distinct national crypto trajectories.
The data underlines that East Asia lacks a single template for crypto adoption or regulation. South Korea remains defined by retail and thematic trading, Japan blends centralized and DeFi activity, Hong Kong caters mainly to regulated institutional business, while China turns to P2P stablecoin use in spite of restrictions.
