Kakaopay's Shares Plunge After Surging on Potential Opportunity in Stablecoins
Dow Jones Newswires
Jun 27, 2025 09:39:00
By Kwanwoo Jun
Shares of Kakaopay fell sharply Friday, after surging recently on market hopes for potential business opportunities in stablecoins--a cryptocurrency pegged to a traditional asset class such as the won or the dollar.
The South Korean mobile-payment stock's volatile trading reflects both expectations and concerns running high among traders over the digital money.
Kakaopay's stock fell 10%--the sharpest daily decline in more than three months--to close at 84,200 won, equivalent to $62.01. The slump followed the stock's forced trading suspensions on Tuesday and Thursday after Korea Exchange warned against the "investment-risk" stock that had surged of 16% on Monday and 30% in the prior session.
Some market analysts deem the stock to be overheated, as it has more-than doubled in a month.
Expectations have been growing among traders that the new administration under President Lee Jae-myung could introduce won-based stablecoins to South Korea. During Lee's election campaign, he was in favor of institutionalizing the cryptocurrency and other digital assets.
But the Bank of Korea has cautioned that stablecoins could pose a risk to financial stability. A widespread adoption of the digital money and compromised trust could result in so-called "coin runs," where issuers could be forced to liquidate assets on massive redemption requests such as bank runs.
The Bank for International Settlements said in its annual report earlier this week that demand for stablecoins has risen significantly, but crypto assets shouldn't be the mainstay of the future monetary system. Stablecoins still fall short of the requirements needed to ensure sound monetary arrangements, the BIS report said.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(09:43 GMT) Kakaopay's Shares Plunge After Surging on Potential Opportunity in Stablecoins
By Kwanwoo Jun
Shares of Kakaopay fell sharply Friday, after surging recently on market hopes for potential business opportunities in stablecoins--a cryptocurrency pegged to a traditional asset class such as the won or the dollar.
The South Korean mobile-payment stock's volatile trading reflects both expectations and concerns running high among traders over the digital money.
Kakaopay's stock fell 10%--the sharpest daily decline in more than three months--to close at 84,200 won, equivalent to $62.01. The slump followed the stock's forced trading suspensions on Tuesday and Thursday after Korea Exchange warned against the "investment-risk" stock that had surged of 16% on Monday and 30% in the prior session.
Some market analysts deem the stock to be overheated, as it has more-than doubled in a month.
Expectations have been growing among traders that the new administration under President Lee Jae-myung could introduce won-based stablecoins to South Korea. During Lee's election campaign, he was in favor of institutionalizing the cryptocurrency and other digital assets.
But the Bank of Korea has cautioned that stablecoins could pose a risk to financial stability. A widespread adoption of the digital money and compromised trust could result in so-called "coin runs," where issuers could be forced to liquidate assets on massive redemption requests such as bank runs.
The Bank for International Settlements said in its annual report earlier this week that demand for stablecoins has risen significantly, but crypto assets shouldn't be the mainstay of the future monetary system. Stablecoins still fall short of the requirements needed to ensure sound monetary arrangements, the BIS report said.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
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