South Korean industry insiders call for liquidity safeguards to be built into regulations for Korean won stablecoins.

Korean Industry Insiders Urge Liquidity Safeguards After Won Stablecoin Price Deviations on Upbit and Bithumb

Korean industry insiders are calling for future Korean won stablecoin regulation to go beyond issuer eligibility, minimum capital and reserve assets, and to include safeguards for initial circulation, issuance and redemption, and secondary market liquidity, News1 reported.

Price gaps show where stablecoin markets can break down

Recent listings on Korean exchanges demonstrated that a stablecoin can trade far from its reference value even when it is meant to track an underlying asset.

JPYC rose to 37.6 won on Upbit after listing, while the reference price at the time was about 8.8 won, more than four times higher. PYUSD also moved from 1,379 won to 1,760 won. EURC reached 7,860 won on Bithumb, more than 400% above the previous day's close.

Reserves protect redemption but not short-term pricing

The insiders said reserve assets can support redemption, but they cannot by themselves prevent short-term price distortion in secondary trading. Thin initial circulation, uneven redemption access and limited liquidity can leave buyers and sellers exposed to sudden gaps between exchange prices and reference prices.

Measures under discussion

They suggested studying market makers or liquidity providers to deepen order books, disclosure when prices deviate from reference levels, and restrictions on market-price orders that can amplify sharp moves.

What the debate means for readers

The discussion shifts attention from whether a stablecoin is backed to whether it remains stable after it starts trading. Future regulatory design will likely be judged by how well it addresses the mechanics that produced the JPYC, PYUSD and EURC gaps, including circulation, redemption and liquidity.