Bank of Korea Says Crypto Investment Poses 'Insignificant' Risk to Local Financial Market
July 09 2018 - 8:42AM
ADVFN Crypto NewsWire
According to South Korean central bank the Bank of
Korea (BOK), the outstanding balance of virtual currency
accounts in domestic banks totalled $1.79 billion as of Dec. 2017,
local news outlet Yonhap reported Friday, July 5.
The BOK’s report considered the $1.79 billion (2 trillion won)
figure to be relatively low, as it is equivalent to around 8
percent of the total deposits operated by the country’s brokerage
houses -–– reportedly worth 26 trillion won ($23.27 billion).The
report therefore suggested that crypto markets do not pose a threat
to traditional local financial markets:
“The amount of crypto-asset investment is not really big,
compared with other equity markets, and local financial
institutions' exposure to possible risks of digital assets is
insignificant. Against this backdrop, we expect crypto-assets to
have a limited impact on the South Korean financial market."
Notably, the BOK’s data set covered the height of the cryptocurrency markets’ unprecedented growth in
late 2017 –– when Bitcoin (BTC) famously hit the $20,000 price point.
The central bank’s conclusion that cryptocurrencies pose a
relatively limited risk to the traditional financial sector comes
in the very same week that the Korean Financial Services Commission
(FSC) revealed it is “not opposed” to
cryptocurrencies and plans to align itself with the G20’s vision of
“unified,” transnational crypto regulations.
March’s G20 summit proposed a firm July
deadline for drafting regulatory recommendations for
cryptocurrencies, calling on “international standard-setting bodies
(SSBs)” to assess necessary “multilateral responses” that would
then proposed for “global implementation.”
Korea is affirming the G20’s multilateral vision of the future
of crypto regulations at what is arguably a pivotal time for its domestic
crypto sphere. Important positive news has been
forthcoming from the government throughout spring, notably
including plans to lift the country’s
blanket ban on domestic Initial
Coin Offerings (ICOs).
Just last week, in a major legitimizing move, three Korean
government ministries revealed a draft version of new
blockchain industry classification standards,
which notably recognized crypto exchanges as regulated financial
institutions for the first time.
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