On Tuesday, Bitcoin, the world’s biggest and best-known cryptocurrency, was trading at $45,219 on Bitstamp Exchange, but data from the Coinmarketcap.com shows it was trading about $4,000 higher in South Korea. Back in January, 2018, the premium went as high as almost $8,000.
“The onshore price for cryptocurrencies in Korea is persistently above international prices suggesting this to be a result of effective capital control that prevents effective arbitrage of onshore and offshore prices,” a Bank of America report showed on Tuesday.
“Korean capital controls allow the ‘Kimchi premium’ to persist,” it said, calling the phenomenon after Korea’s spicy pickled cabbage side dish.
Currently, individuals’ purchases of foreign currency are capped at 50,000 annually.
The estimated daily volume of trading in cryptocurrencies in South Korea reached 1,480 trillion won ($1.31 trillion) in the first quarter, and the daily trading volume sometimes exceeds the combined trading volume on the KOSPI and KOSDAQ share markets, the report said.
