One bitcoin is currently a bit cheaper in South Korea by $100, with trading volumes there seemingly plummeting from their heyday of billions of dollars a day in just one exchange.
Back then, one bitcoin was at times $1,000+ more expensive in South Korea than in other global exchanges, but those sort of gaps might now be closed by the launch of a Korean Won stablecoin from the team behind Block By Block Capital.
“The 4 BXB Capital co-founders decided to self-fund a separate initiative to create the stablecoin. We’re leveraging the networks and some of the existing partnerships from BXB Capital, but KRWb is a separate company,” Alex Friedberg, BXB co-founder, told Trustnodes.
They’re currently in the beta phase with the ERC20 KRWb smart contract already out. Some $300,000 worth of KRW has already been tokenized, with Friedberg stating a 3rd party audit report has been published in South Korean awaiting English translation.
You can currently buy KRWb through their AirSwap space, where they’re “working with QCP Capital to offer market liquidity” according to Friedberg.
We wanted to buy one KRWb so that it can decorate our testrun eth address, but they’re currently being offered in blocks of 1 million tokenized won, worth about $1,000.
“We’re working on smaller liquidity within the next week – which hopefully allows for just 1krw. Because we’re in the beta period, it’s just limited right now,” Friedberg says before adding:
“We plan to be listing on Coblic inside of Korea with a KRW fiat pair and then BEQUANT on the global market side.”
Coblic appears to be a new South Korean exchange which will offer KRW/KRWb trading pairs next week. They’re in talks with bigger exchanges, with Friedberg stating:
“Under our previous activities at BXB Capital, we build strong relationships with many of the top Korean crypto exchanges through our crypto trading and arbitrage activities.
So yes, we have brought up KRWb with most of the top exchanges in Korea and are at various states of progress across the board.”
Meaning that Korean money might soon fly through the ethereum blockchain with the technical aspects here seemingly being not much different than for other ERC20 stablecoins smart contracts.
The regulatory aspects for South Korea are however a bit less clear. They’ve implemented some strict requirements there which may in part have contributed to the so called “Kimchi Premium,” but Friedberg says:
“All Korean exchanges are not regulated at current times, which includes Upbit, Bithumb, Korbit, Coinone, etc.
They operate under something in Korea that roughly translates to a regular online service provider company. Or something like this. But there are not yet clear guidelines for the crypto exchanges.”
He couldn’t easily explain what caused the premium or what now appears to be a mini-discount, stating “it’s definitely very complicated and hard to comment on,” but suggested KRWb might assist in arbitrage:
“Anytime a new product is introduced into a market, it definitely should have some impact. We’re very hopeful that it will help normalize the global price disparities.
Which would bring great benefits to the Korean retail traders/investors in hopes that they don’t have to pay such high premiums for access to the crypto economy.”
Arbitrage has been one of the main use case of tokenized fiat in addition to providing a very high level of convenience and accessibility.
One can’t think of an easy way of getting your hands on KRW, for example, or even dollars if you’re outside of USA.
There’s obviously plenty of physical exchange points, but in an on-demand world that may appear as too much work for a new generation.
While in more remote places, it might require traveling to a new town, or a new city, or perhaps even to a different country.
In contrast, even the most remotest of villages probably have at least one smartphone. So allowing the tokenized dollar and now the tokenized won to instantly travel to all corners of earth.
It is that speed and convenience that has allowed stablecoins to gain a market cap of $3 billion or so, with Tether alone handling at times $6 billion or more in trading volumes.
USDT is everywhere. From South Africa to China, Arabia, Russia, Europe and both Americas with stable coins very popular in crypto only exchanges and in decentralized exchanges.
Whether a non-usd tokenized fiat would be popular, however, remains to be seen as KRWb is the very first non-dollar stablecoin as far as we’re aware, with tokenization so marching on.