[REPORTERSNOTEBOOK] Korea's crypto exchanges need room to become financial platforms

In January 2018, Upbit recorded $7.57 billion in daily trading volume, making it the world's largest cryptocurrency exchange by volume. Binance ranked second, while Bithumb, another Korean exchange, came in third.

Eight years later, the landscape looks very different. On Thursday, Binance recorded more than $10 billion in trading volume, compared with about $1 billion for Upbit and $436.2 million for Bithumb, according to CoinGecko.

The crypto downturn has weighed on exchanges globally. But major overseas platforms have diversified into derivatives, staking and other businesses, giving them more ways to weather a prolonged industry slump.

By contrast, Korean exchanges remain largely confined to spot trading under the current regulatory framework, leaving them more exposed when trading volumes fall. In response, five crypto exchanges are offering zero trading fees, intensifying a price war for market share.

The imbalance is becoming harder to ignore as the global digital asset market broadens beyond spot trading. Institutional capital is entering through Bitcoin and Ethereum spot exchange-traded funds, derivatives and tokenized real-world assets, while stablecoins are gaining traction in payments and remittances.