South Korean Cryptocurrency Exchange Upbit Works with Payments Company Naver Pay to promote a won (Krw) StableCOin initiative, KBS reported, citing an unidentified official from Dunamu, Upbit’s parent company.
The two companies are pursuing a payment company based on stableecoin, the official said, although details remain sparse. A stableecoin is a crypto token whose value is linked to a real asset such as dollar or gold.
“We will specify the scope and methods of cooperation as soon as the relevant system is established,” the official told KBS.
Korea’s crypto-friendly president, elected in early June, has said he supports a “Won-based StableCOin market”, an attitude that earlier this week spurred Bank of Korea to stop the plans to roll out a central bank’s digital currency (CBDC).
A KRW StableCoin is probably an important event for local crypto traders who have struggled with restrictions on moving Krw in and out of the country. It has led to a large spread and arbitrage options, the trade that got FTX founder Sam Bankman, fried his first remarkable wealth.
The spread between South Korean and American exchanges has often been labeled as the “Kimchi prize.” The roll out of a KRW stableCoin, as long as it can be converted on-chain, would mean that dealers can simply swap the stablecoin for USDT or USDC where they circumvent FIAT restrictions in the region and essentially ironing any significant spreads in the price.
