South Korea has pledged up to $350 billion to U.S. projects in July 2025 to lift U.S. export tariff relief to South Korea. Negotiators then debated how much they would have to pay in cash, rather than in loans, guarantees or stock. On October 20, Industry Minister Kim Joon-kwang said the US government had softened the idea of providing all-cash financing. However, the difference remains large. According to reports, the US is demanding nearly $200 billion in cash over eight years, but the South Korean government says it can manage about $15 billion a year without straining reserves or domestic credit. That tension is now defining the path of policy, the path of currency, and the path of cryptocurrencies and liquidity.
What the $350 Billion Demand Means for the Market and Why Cash Matters for Cryptocurrencies
Cash is instant. Loans and guarantees are not. Due to the increase in the cash portion, US dollars will flow out on a fixed schedule, tightening domestic won liquidity. As banks and corporations prioritize the dollar, local funding costs rise and foreign exchange desks go on the defensive.
Crypto is feeling the change first through fiat increases, order book depth for the KRW pair, and the cost of market-making inventory. Depth becomes thinner. The spread will widen. As domestic liquidity hesitates, the rails move, causing traders to rotate into USD-stablecoin pairs.
Why U.S. tariffs are at the center of negotiations
This investment framework is directly related to US tariffs on South Korean exports, including cars and parts. As long as these tariffs remain in place, exporters will protect their margins by building dollar buffers, which will move liquidity away from won risk. If the cash method proves too heavy, tariff relief will stall and the won will remain sensitive.
Shifting financing to phased disbursements and a credit backstop would increase the likelihood of tariff relief and ease won stress. Policy choices will impact the positioning of the cryptocurrency, as the same liquidity that runs the factory drives the KRW buy side of the exchange.
Impact of large cash calls on KRW and South Korea’s crypto industry
A high cash ratio means short-term dollar demand and won pressure. Although the Bank of Korea can rely on volatility, it still allocates its balance sheet.
In such a situation, Won deposits on exchanges will slow down, the use of stablecoins as a proxy for the USD will increase, and altcoins will lose relative prominence while traders focus on deeper liquidity BTC and ETH. This behavior is reasonable. Defend your base and add risk once the currency and credit are stable.
What would change if the US accepted incremental funding instead of large amounts of cash?
A tiered or credit-weighted structure smooths out your FX profile. The won’s liquidity is maintained, banks maintain capacity to increase production, and market makers are more comfortable carrying inventory.
With an eye toward tariff relief, exporters will loosen the dollar’s grip, the won will stabilize, and the crypto market will expand. In the process, the spread on the KRW pair will tighten, increasing altcoin participation and reducing reliance on stablecoins for hedging.
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