South Korean industry participants are calling for liquidity safeguards to be built into the country’s forthcoming won-stablecoin rules, Korean outlet News1 reported on September 27, after several foreign stablecoins showed sharp price distortions on domestic exchanges during September. Japan’s yen-linked JPYC climbed to 37.6 won on its September 17 debut on Upbit — more than four times its roughly 8.8-won reference value — before settling back into the 8-won range the next day. PayPal USD hit an all-time high of 1,760 won on the same exchange the same day before falling toward 1,360 won, while Circle’s euro-backed EURC spiked to 7,860 won on Bithumb, more than 400% above its previous close, and USDG reached 3,048 won on Bithumb against a prior close near 1,358 won.
Industry participants cited by News1 want South Korea’s Financial Services Commission (FSC) and lawmakers to require a sufficient initial circulating supply before exchange trading begins, maintain functioning issuance and redemption channels, and consider obligating market makers to provide continuous buy-and-sell quotes. Other proposals include requiring exchanges to display a stablecoin’s deviation from its reference value and restricting unusual orders when prices move far from the underlying currency. An industry official told News1 that even a won-backed token could see sharp volatility if demand outpaces circulating supply.
For readers moving money into or out of Korea — for relocation, property purchases or other transfers — the episode is a reminder that stablecoin liquidity risk sits apart from currency risk: a token can be fully backed by reserves and still trade well away from its stated value on a given exchange if buy-and-sell depth is thin, meaning the price at the moment of conversion may not match the reference rate.
The FSC has not finalised rules on the proposed liquidity safeguards, and continues to weigh whether won-stablecoin issuance should be limited to a bank-led structure — a position the Bank of Korea (BOK) has backed on monetary-policy and financial-stability grounds. An FSC official said on September 22 that the second-stage Digital Asset Framework Act — which covers stablecoin issuance and circulation, alongside 10 pending digital-asset and stablecoin proposals — is expected to reach a National Assembly bill review subcommittee in November.
References
Crypto.news – South Korea weighs liquidity rules for won stablecoins
