Bank of Korea calls for surveillance of ‘Kimchi Premium’ in crypto market.
Kimchi Premium, a gap in cryptocurrency prices in the South Korean exchanges compared to foreign exchanges, has been called to surveillance by the country’s central bank, Bank of Korea (BOK)
BOK officials have called for relentless surveillance of the South Korean crypto exchange market and the heightened increase in crypto premiums, mainly domestic prices rather than global prices. Bitcoin is one such coin to fall under the vigilance of BOK.
Kimchi Premium, named after a popular food dish in Korea, saw a trade in Bitcoin and Ethereum that was way higher in the domestic market than in global market due to speculative investment and a quick increase in the face of limited supply
“Price gaps between domestic and overseas cryptographic assets have occurred repeatedly, and technical and institutional factors that negatively affect smooth capital flows are difficult to be resolved in the short term,” said a report from BOK.
Since the price difference could cause malicious effects like starting an illegal foreign exchange transaction, BOK highlighted the need for relentless surveillance and efforts to bring about an awareness among the public in order to stop investors going for “irrational investments based on a false hope of a price increase.”
‘Drop in crypto prices due to anonymous trading’
Earlier, in the month of July, BC Focus reported that the Financial Services Commission(FSC) stated that the drop in prices is because of the anonymous trading in cryptocurrencies.
Kimchi Premium took a negative turn in the month of February due to the decreased amount of demand in local markets but came back strongly during the next few months due to an increase in trading activity.
Image via Shutterstock
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