South Korea Pushes for Stablecoin Liquidity Safeguards

The push for new rules follows a series of abnormal price spikes in September. On Upbit, the yen-linked JPYC surged to 37.6 won—more than four times its reference value—while PayPal USD reached 1,760 won. Similarly, Bithumb recorded a 400% surge in EURC, which climbed to 7,860 won despite stable conditions in overseas markets. Industry participants argue these incidents stem from limited circulating supply and a lack of market-making support rather than flaws in the assets themselves.

Regulators are now under pressure to expand the upcoming second-stage Digital Asset Framework Act to include secondary-market safeguards. Proposed measures include mandatory liquidity provider requirements, minimum initial circulating supply, and automated circuit breakers to flag or restrict trades when prices drift too far from the underlying currency. While the Financial Services Commission continues to debate the broader scope of the legislation, an official stated that the bill is expected to reach the National Assembly for review in November. The central bank remains a key stakeholder, continuing to advocate for a bank-led issuance structure to protect monetary policy and financial stability as the legal framework takes shape.