Over 21,000 Korean Investors Paid Steep Premiums for Yen Stablecoin on Upbit

More than 21,000 investors in South Korea bought a yen-pegged stablecoin at sharply inflated prices after it was listed on the domestic cryptocurrency exchange Upbit, highlighting the risks that can emerge when demand overwhelms the supply available for trading.

Data from the office of Democratic Party lawmaker Park Min-kyu showed that 21,219 investors, excluding duplicate accounts, purchased JPYC at prices more than 10 percent above the won-yen exchange rate during the five days after its Sept. 17 listing. Together, they bought 12.76 billion JPYC tokens for 259.9 billion won. Park serves on the National Assembly’s National Policy Committee.

The gap between JPYC’s yen-linked reference value and its market price widened as buyers rushed into a market with insufficient tradable supply. During the period from Sept. 17 through Sept. 21, 2,574 investors paid prices more than 300 percent above the reference rate. Their purchases totaled 226.94 million tokens and cost about 8.3 billion won.

A further 11,449 investors bought between 200 percent and 300 percent above the reference price, purchasing 2.79 billion tokens for approximately 85.4 billion won. The figures show that the extreme premiums were not confined to a small number of isolated transactions, despite JPYC being designed to track the value of the Japanese yen.

As the trading price moved back toward its reference value, investors who entered at the elevated levels were exposed to losses. As of Sept. 21, 3,792 investors still held JPYC positions totaling 240,648 tokens. Their combined unrealized losses were estimated at about 5.03 billion won, equivalent to an average loss of roughly 1.32 million won per holder.

Only 7,006 investors, or 33 percent of the people who traded during the period, sold their holdings and recorded realized gains. The outcome underscores how a nominally stable asset can still experience severe market dislocation when the supply available on a particular exchange is too limited to meet an abrupt surge in demand.

An exchange industry official said a stablecoin trading at a premium of more than 300 percent indicated that supply conditions and related factors should have been examined more closely during the listing process. Industry participants also argued that the growing presence of yen-denominated digital tokens in Korea strengthens the case for introducing a won-based stablecoin as a domestic alternative.