South Korean Industry Pushes Liquidity Safeguards for Stablecoins
Proposed rules would address initial circulation, redemptions, secondary-market liquidity and price-deviation disclosures after sharp moves in JPYC, PYUSD and EURC.
South Korean industry participants are calling for future stablecoin rules to cover secondary-market liquidity after several tokens traded far from reference values on local exchanges.
The proposals would address initial circulation, issuance and redemptions, secondary-market liquidity and disclosures when prices deviate from reference values. Regulatory discussions also cover issuer identity, minimum capital and reserve assets.
JPYC, a Japanese yen stablecoin, reached 37.6 won on Upbit, compared with a reference price of about 8.8 won. PYUSD rose from 1,379 won to 1,760 won, while EURC reached 7,860 won on Bithumb, more than 400% above its previous closing price.
The episodes show the difference between redemption support and trading liquidity. Reserve assets can support stablecoin redemptions but do not by themselves prevent short-term price distortions in secondary markets.
Suggested measures include designated market makers or liquidity providers, disclosures when prices move away from reference values and limits on market-price orders. The proposals would broaden stablecoin safeguards beyond issuers, capital and reserves to include trading conditions after listing.
