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.