Central Bank of South Korea Reported on an Estimated Splash of Cryptocurrency Value Difference in South Korea and International Market
South Bank of South Korea (BoK) published a message, warning customers about the forthcoming increase in the difference between the cost of cryptocurrency on local and foreign crypto-exchange platforms. The statement was published in No Cut News on September 11.
The bank reported on the approach of such a phenomenon as “kimchi premium“, which is characterized by an increase in the difference in the cost of cryptocurrency on South Korean and foreign crypto-exchange platforms. The strongest effect of kimchi premium is manifested precisely in the case of Bitcoin.
A representative of the bank, Kim Dong-soup, noted that the emergence of kimchi premium indicates “overheating of the domestic market.”
According to the data, South Korea is one of the world’s largest cryptocurrency market, second only to the US and Japan. CoinMarketCap ceased to provide data on South Korean crypto-exchange exchanges earlier this year, citing a too large difference in value.
For example, from July 2017 to May 2018, the cost of cryptocurrencies on South Korean exchanges exceeded international indicators by 5%. The highest rate was recorded in January of this year when the difference in value was 48.29%. In February, the difference significantly decreased and almost disappeared.
The bank urged the government to take control of the situation and inform the population that it will help to avoid a lot of problems connected with a biased assessment of investments in the cryptocurrency.
As reported in the BoK report, the emergence and growth of “kimchi premium” can have an impact on the country’s markets, including transactions with foreign currencies.
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