South Korea’s Financial Services Commission is considering a market-making system for digital assets after JPYC surged to more than four times its opening price on Upbit.

It is a striking example of how little buying and selling can move a new stablecoin market. But the regulator’s idea should not be mistaken for proof that market makers make such markets healthy.

Thin liquidity turned a listing into a price shock

Upbit opened trading in JPYC on Sept. 17. The yen-backed stablecoin began at 12 Korean won and reached 37.6 won an hour later, according to Cointelegraph’s report.

The spike was attributed to limited liquidity. In practical terms, there were not enough buyers and sellers available at prices traders were willing to accept. A…