Kimchi Coins Surge 567% as South Korea Plans Won-Backed Stablecoin

Kimchi coins, a category of low-cap altcoins popular among certain segments of the South Korean crypto community, have experienced significant growth in recent days. This surge is largely attributed to the buzz surrounding the government's new initiative to launch a won-backed stablecoin. The government's plan has sparked considerable interest in the financial sector and the blockchain industry, with related coins attracting heightened attention.

Several coins, including MEVerse (MEV), fanC (FANC), and Wrapped Nine Chronicle Gold (WNCG), have seen substantial price increases. MEV, for instance, rose from around KRW 3 to KRW 20 won, while FANC increased from KRW 5 to KRW 13 won. WNCG also saw a notable rise from around KRW 29 won to KRW 57 won. Other tokens like BORA and Storm X (STMX) have also experienced price surges of over 60% on domestic crypto exchanges.

MEV is issued by the KOSDAQ-listed gaming and entertainment company Me2On, while FANC is issued by CELEBe, a Seoul-based startup specializing in mobile app and social media-related services. These coins have historically been ignored by investors, with low trading volumes and market prices. However, the recent interest in the government's stablecoin plans has led to a resurgence in their popularity.

Despite the excitement, experts have urged caution. Apywa, a South Korean analyst, has graded FANC at C-, with 41.48 points out of 100, while MEV scores 45.83 points (grade C). BTC, by contrast, is rated A+ with almost 95 points. Apywa deducts points for coins that show relatively low levels of community and development activity. The price rise may be attributable to possible relationships with overseas stablecoins such as Tether (USDT) or USD Coin (USDC), or certain payment and settlement functions that have caught the eye of some traders.

Experts are concerned about market confusion and potential risks to investors. An unnamed securities firm employee noted that with the government's push to issue a won-denominated stablecoin, fintech and blockchain companies are announcing business plans, claiming relevance, and seeing their prices rise. A crypto industry insider added that in the past, projects like Paycoin (PCI) soared when local government stablecoins were a big thing, only to drop by more than 30% in a few days. Investors are advised to carefully consider the operational status and business viability of projects and to invest with caution.