JPYC trading volume reached 45.1 billion won (US$32.49 million) last Saturday, compared with a daily average of $163,020 during the roughly 11 months before the token was listed, according to CoinGecko.
The turnover was also more than 500 times the $64,570 recorded on Sept. 16, a day before Upbit began supporting JPYC trading.
JPYC transfers increased 83.3-fold when the 24 hours after Upbit's listing announcement were compared with the preceding 24 hours, according to an analysis by Cho Jae-woo, head of Hansung University's Blockchain Research Institute.
Transaction counts rose 26.4 times, active wallets increased 12.6 times and newly active wallets climbed 22.4 times over the same comparison period.
About 973 million of the 3.69 billion JPYC newly issued on Ethereum after the listing, or 26.4 percent, flowed into Upbit.
Around 80 percent to 90 percent of those inflows moved from decentralized exchanges through individual wallets before reaching Upbit deposit wallets.
Some of the flows reflected arbitrage between decentralized exchanges and the Korean market, Cho said, as investors sought to take advantage of price differences following the listing.
JPYC is designed to track the Japanese yen, but its Korean price briefly moved far above that level immediately after trading began.
The token started trading at 12 won on Upbit on Sept. 17 and climbed to as high as 37.6 won, while it was trading in the 8-won range overseas at the time.
The price returned to around the global market level after Upbit expanded deposit support and more tokens became available for trading.
Market participants attributed the temporary gap mainly to limited initial liquidity and concentrated buying demand rather than a change in the underlying value of the yen.
The surge came as Korean regulators were already examining how offshore-issued stablecoins are being used domestically.
The Financial Services Commission's Financial Intelligence Unit and the Financial Supervisory Service have been reviewing services that allow tokens including JPYC to be used to purchase Korean mobile gift certificates, citing potential money-laundering concerns.
Authorities are also considering rules governing the domestic distribution of offshore stablecoins as part of the country's second-stage digital asset legislation.
Separately, the Bank of Korea (BOK) has been studying how stablecoin markets could become linked with conventional foreign exchange markets as Korea's digital asset market develops.
A Sept. 3 BOK Issue Note found that stablecoin demand was more likely to be transmitted into exchange rates when global intermediaries could directly access both fiat currency and stablecoin markets.
In a report released on Sept. 3, the Bank of Korea (BOK) said that stablecoin demand was more likely to be transmitted into exchange rates when global intermediaries could directly access both fiat currency and stablecoin markets.
In South Korea, where the won lacked the direct global exchange trading pairs examined in the study, stablecoin buying pressure was reflected mainly in higher local premiums rather than a statistically significant change in the won-dollar exchange rate.
The BOK said such linkages could strengthen if corporations and foreign investors gain wider access to the country's digital asset market, but the study focused on dollar stablecoins and does not show that the recent JPYC surge affected the won-yen or won-dollar exchange rates.
AJP Takeaways
- JPYC trading volume reached $32.49 million on Sept. 19, about 200 times its daily average before the Upbit listing and more than 500 times the level recorded three days earlier.
- JPYC blockchain transfers rose 83.3-fold around the listing announcement, while newly issued tokens flowed rapidly into Upbit through decentralized exchanges and private wallets.
- South Korean regulators were already reviewing the domestic use of offshore stablecoins, while the BOK has separately studied how stablecoin markets could become more closely linked with conventional foreign exchange markets.
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