Citadel-backed exchange moves to launch 'won-dollar stablecoin derivatives'

A Citadel Securities-backed crypto (digital asset) exchange is pushing to launch blockchain-based derivatives that track the won-dollar exchange rate.

According to Bloomberg on the 23rd (local time), EDXM International, the global affiliate of U.S.-based EDX Markets, plans to roll out perpetual futures tied to the Korean won. The product aims to serve as a digital trading alternative to the existing won-dollar non-deliverable forward (NDF) market.

To that end, it will use the won-denominated stablecoin 'KRWQ' and the dollar-based stablecoin USDC. KRWQ is a won-pegged stablecoin issued offshore by Cayman Islands-based Brainpower Labs, structured to fall outside the scope of domestic regulation.

EDXM said it plans to offer real-time settlement long and short positions on the won-dollar exchange rate through the product. It touted costs that are 50 to 75% lower than traditional NDFs and the ability to trade without banking networks.

The won-dollar NDF market is estimated at about $27 billion in average daily turnover, and is regarded as the world’s largest non-deliverable currency derivatives market. EDXM aims to replicate it on blockchain rails and reach $500 million in average daily volume within this year.

The market is also watching the product’s potential to create arbitrage opportunities alongside existing NDFs. Analysts say demand for hedging and macro trading that exploits price gaps between the two markets could flow in.

Still, in Korea, stablecoin regulation has yet to be established, making policy uncertainty a key variable. In particular, if the offshore issuance model for won stablecoins expands, regulators may respond.