Abnormal fluctuations in the price of South Korean stablecoins: The industry calls for the improvement of circulation security mechanisms

Recently, there has been a significant price deviation of fiat currency-pegged stablecoins in South Korean virtual asset exchanges. The Japanese yen stablecoin JPYC surged to four times its benchmark price after its listing, the euro stablecoin EURC skyrocketed over 400% in a single day on Bithumb, and the US dollar stablecoin PYUSD also showed a noticeable premium.

Analysis suggests that the aforementioned fluctuations are due to insufficient circulation in the early listing phase combined with concentrated buying, unrelated to the issuer's asset preparation. Industry experts point out that relying solely on reserves cannot prevent price distortions in the secondary market, calling for the establishment of initial circulation guarantees, market maker (MM) and liquidity provider (LP) mechanisms during the design phase of the original Korean won stablecoin system, as well as the introduction of measures such as public disclosure of price deviation rates and restrictions on market orders.