TLDR:
- South Korea led East Asia with a $449.1B crypto economy and strong AI-token trading.
- Hong Kong’s institutional platforms captured 16% of service inflows during 2026.
- Japan’s DEX market share reached 34.5%, led by growing retail participation.
- China’s unique stablecoin P2P wallets grew 43x between Q1 2024 and Q2 2026.
East Asia’s crypto economy exceeded $1.2 trillion, with South Korea leading at $449.1 billion during 2026. Chainalysis found sharply different market structures across South Korea, Japan, Hong Kong, China, and Taiwan.
The region contracted modestly overall during the period, aligning with the global bear market. Yet individual markets moved in different directions, shaped by regulation, taxation, institutional access, and local trading preferences.
South Korea Leads East Asia’s Crypto Economy
South Korea recorded a $449.1 billion crypto economy, growing 12.3% period over period. Exchange-related flows also increased by $51.1 billion, reflecting the strength of its retail-driven market.
The Chainalysis blog report found that South Korean traders showed an unusually strong preference for AI-related cryptocurrencies. By June 2026, AI cryptocurrencies represented the largest defined thematic category by won-denominated trading volume.
Worldcoin (WLD) led the category with $7.41 billion in volume. SAHARA recorded $3.2 billion, followed by VIRTUAL at $2.7 billion, BIO at $2 billion, and NEAR at $1.7 billion.
AI-crypto activity was far stronger in South Korea than comparable markets. AI assets accounted for a 19.5-times larger share of won trading than yen trading.
Japan’s $228.3 billion crypto economy showed a different pattern. DEX activity reached 34.5% of its services market, while DEX engagement rose more than 200% since 2022.
Chainalysis also found that roughly one in four Japanese exchange users later deposited funds into DeFi protocols. Smart contract tokens increased their share of yen trading volume from 10% to 15.4%.
Tax treatment remains a major factor for both markets. Japan’s maximum marginal crypto tax rate reached 55% during the study period, while South Korea had no crypto profits tax.
South Korea has a 22% crypto profits tax scheduled for 2027. Japan also advanced tax reforms in July 2026 that could shift eligible crypto gains toward roughly 20% separate taxation.
Hong Kong and China Show Opposite Crypto Trends
Hong Kong’s $192.2 billion crypto economy stood out for its institutional activity. Institutional platforms captured 16% of service inflows, nearly three times higher than any regional neighbor.
That share rose from around 9% two years earlier. Custody providers, prime brokers, and market-making desks represented 85% of the institutional category.
Hong Kong also received nearly $24 billion in inbound service-to-service transfers. Cumulative net business-to-business inflows reached $17.4 billion by mid-2026.
China presented the opposite model. Despite its longstanding ban on crypto services, Chainalysis estimated its crypto economy at least $176.3 billion.
Domestic peer-to-peer activity represented 59.1% of China’s crypto economy. Unique wallets sending stablecoin P2P transactions grew 43 times between Q1 2024 and Q2 2026.
Stablecoin activity accelerated from March 2025, with monthly additions rising from roughly $240 million to nearly $5 billion a year later. However, Chainalysis described the potential connection with China’s expanded social credit system as a working hypothesis.
China’s self-custodied stablecoins also showed unusually high turnover. Holdings circulated at 33.2 times annually, compared with a global average of 9.3 times.
East Asia has no single crypto-market model. South Korea remains retail-led, Japan combines retail and institutional activity, Hong Kong concentrates regulated institutional flows, while China relies heavily on P2P stablecoin transactions.
