The South Korean Central Bank – BOK (Bank of Korea) - has said that cryptocurrency markets do not pose a significant threat to local financial markets in another positive development for the country's crypto industry.
In a report outlined by local news agency Yonhap, the BOK said on Friday that the balance of 2 trillion Won ($1.79 billion) reached during the peak of December last year represents a small amount compared with other 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."
Equivalent to only 8% of the total deposits operated by South Korean brokerage houses, the report also explains how the South Korean government has implemented several measures to shore up the market and make it more transparent – including a ban on trading by minors, and a real-name account system.
Following enormous volume during the frantic December market, when South Korean exchanges Upbit and Bithumb were both regularly processing $1 billion a day in trading volume, regulators tightened rules after previously banning ICOs in September.
With the country’s Financial Services Commission (FSC) last week announcing that it is set to loosen crypto regulation and potentially lift the ICO ban in line with the G20’s goal of “unified regulations,” South Korea hopes to lead the way by treading the fine line between preventing money laundering and other criminal activity and stifling innovation in such a young industry.
Featured Image Credit: "Golden bitcoin and South Korea flag" by "Marco Verch" via Flickr; licensed under "CC BY 2.0"