Original sourcect.com
Summary
South Korea is reassessing crypto market-making rules after the yen-backed stablecoin JPYC traded as high as four times its peg on Upbit due to insufficient liquidity. The Financial Services Commission is considering introducing a market-making system to improve liquidity, price stability, and redu…
Key points
- It illustrates how insufficient liquidity can push a stablecoin far off its peg and signals South Korea may use market-making rules to improve market structure.
- Market-making rules and stablecoin legislation direction will affect exchange liquidity provision and user protection mechanism design.
- Exchanges and market makers operating in South Korea must prepare for possible market-making exemptions and disclosure requirements.
Editorial note
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