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BOK calls for monitoring of 'kimchi premium' in cryptocurrency

All Headlines 15:49 September 11, 2018

SEOUL, Sept. 11 (Yonhap) -- Major cryptocurrencies could be traded with a massive premium in the South Korean market, central bank officials here said Tuesday, calling for careful monitoring of prices.

Earlier this year, such digital assets as Bitcoin and Ethereum were traded far higher in the local market than globally due to speculative investment and a rapid increase in the face of limited supply.

Following the government's ban on anonymous trading, among other measures, most of the so-called kimchi premium has disappeared, according to state regulators.

"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," the Bank of Korea (BOK) said in its latest report.

"In this regards, chances are that the price gap in the cryptocurrencies could widen still further," the report said.

Noting that the price difference could cause side effects, such as inducing illegal foreign exchange transactions, the BOK stressed the need for continued monitoring and efforts to raise public awareness to prevent local investors from going for "irrational investments based on a false hope of a price increase," the BOK said.

BOK calls for monitoring of 'kimchi premium' in cryptocurrency0

graceoh@yna.co.kr
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