South Korea is considering introducing a formal market-making system for cryptocurrencies after a JPYC stablecoin incident exposed structural liquidity weaknesses on domestic exchanges. On September 17, JPYC, designed to track the Japanese yen, reached a price of 37.6 won on Upbit, more than four times its theoretical value in under an hour, due to insufficient liquidity on the order book. South Korea’s Financial Services Commission is now examining the possibility of creating a regulatory framework allowing market makers to provide continuous two-sided liquidity, which would require an exemption from the anti-manipulation provisions of the Virtual Asset User Protection Act.
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