Pegged 1:1 to the dollar… Tether 'abnormally surges' into the 1500-won range
Summary
- It reported that major dollar stablecoins such as Tether were trading in the 1500-won range due to U.S.-China tensions and a sharp rise in the won-dollar exchange rate.
- It stated that the Seoul foreign exchange market's closure during the holiday led to an excessive premium, widening the price gap between stablecoins and the won-dollar exchange rate to as much as 80 won.
- It reported that demand for stablecoins on domestic exchanges such as Upbit increased significantly, and prices were only partially adjusted after the foreign exchange market reopened and authorities intervened.
Premium as demand rises amid U.S.-China tensions
Buying resumes after the holiday… unusual rise
Amid concerns that a U.S.-China tariff war might re-erupt and the won-dollar exchange rate surged, major dollar stablecoins such as Tether and USD Coin traded above 1500 won per dollar. Analysts say that a 'premium' was added as domestic demand for dollar stablecoins increased, and that the closure of the Seoul foreign exchange market for the Chuseok holiday, which removed the benchmark price, also had an effect.
On the 13th, according to cryptocurrency exchange Upbit, Tether was trading at 1505 won per dollar at 3:30 p.m. that day. Circle's USD Coin recorded 1506 won. At the same time, the won-dollar exchange rate closed weekly trading at 1425 won 80 jeon. Stablecoins are pegged 1:1 to the dollar's value, so domestic trading prices typically follow the won-dollar exchange rate. Normally, the price gap between the won-dollar exchange rate and stablecoins is around 10–20 won.
The approximately 80-won price gap that day is interpreted as the result of an excessive premium accumulating while the Seoul foreign exchange market was closed for the Chuseok holiday. When U.S. President Donald Trump said on the 10th, "I will impose an additional 100% tariff on China," domestic dollar demand poured into stablecoins. The volume of Tether traded on Upbit and Bithumb that day reached 137.7 million dollars. At one point on Upbit, Tether's price even exceeded 1600 won.
That day, Tether's price returned to the low 1500-won range after the foreign exchange market resumed and authorities engaged in verbal intervention.
Reporters Kim Jin-seong/Jo Mi-hyeon jskim1028@hankyung.com
Korea Economic Daily
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