The Bank of Korea recently revealed to local news agency Yonhap that the outstanding balance of virtual currency accounts in the country’s banks reached up to $1.79 billion as of December 2017.
While the number is comparatively low, as the amount equals roughly 8 percent of the total deposits, the numbers do suggest that the crypto market does not pose a threat to the traditional financial market.
Indeed, the BoK concluded that:
“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.”
The central bank’s analysis was released in the same week as the Korean Financial Services Commission (FSC) expressed support for cryptocurrencies and revealing that they plan to align itself with the G20’s plan for a “unified,” transnational crypto regulatory framework.
News in the South Korean crypto industry has been positive as of late, with the government seriously considering plans to lift the ICO ban in the country.
Meanwhile, in a major move, three government ministries unveiled a draft of proposed blockchain industry classification standards last week. These standards notably recognize cryptocurrency exchanges as regulated financial institutions in the country. If passed, this would be a major victory for blockchain and crypto in the country.