South Korea Weighs Market-Making System Amid Stablecoin Price Surge

The Financial Services Commission (FSC) of South Korea is considering introducing market-making activities to increase stability and efficiency in the country's digital asset landscape.

This move comes after a recent incident where the yen-backed stablecoin JPYC traded for as much as four times its peg on Upbit, a major South Korean crypto exchange, due to limited liquidity.

The FSC's Director of Digital Finance Policy, Yoo Young-joon, stated that they will review introducing market-making systems to address the issue and prevent user losses from price surges.

The current Virtual Asset User Protection Act does not contain an exemption for market-making from its market manipulation provisions, preventing market makers from providing liquidity in crypto markets.