A U.S. dollar-based stablecoin listed on Upbit, a domestic virtual asset exchange, experienced sharp swings. Even after the surge in Tether (USDT) on Bithumb in Oct. last year, instances of stablecoins showing instability have continued to repeat.
According to the virtual asset industry on the 1st, USDS jumped 25% to 2,012 won on Upbit at about 5:40 p.m. on the 31st. Five minutes later, it plunged 24% to 1,530 won. USDS began transactions on Upbit from 1 p.m. that day, then suddenly spiked and plunged.
USDS is a dollar-based stablecoin. A stablecoin is a virtual asset that minimizes price volatility by pegging its value 1-to-1 to a real asset such as a fiat currency like the U.S. dollar or gold. The day before, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,530.1 won per U.S. dollar.
In the market, there are claims that the sharp swings in USDS on Upbit are the same as the Tether incident on Bithumb in Oct. last year. Tether is a virtual asset pegged to the U.S. dollar, and it once briefly soared more than 300% on Bithumb from the 1,400-won range to 5,755 won.
The industry explained that abnormal surges in stablecoins can appear on all exchanges. The surge in Tether on Bithumb occurred when a single investor submitted a large market buy order. The latest USDS spike on Upbit appears to be the same phenomenon. An Upbit official said it was identified as an abnormal surge caused by a rush of market buys.