The Bank of Korea (BOK) has revealed that the outstanding balance of digital currency accounts in local banks amounted to $1.79 billion (about 2 trillion won) as of December 2017, according to a recent report by local news agency Yonhap.
The report by Bank of Korea, which is the Central Bank of South Korea, showed that the $1.79 billion figure is equivalent to about 8 percent of the total deposits operated by the country’s financial agencies. The total deposit is reportedly worth $23.27 billion (26 trillion won). The central bank, therefore, considered the amount to be relatively low and suggested that cryptocurrency markets hardly pose a threat to traditional financial markets. According to the report:
“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 dataset highlighted the height of the digital currency markets’ exceptional growth in the latter part of 2017 when the price of Bitcoin (BTC) soared to a high of about $20,000.
The deduction by the Bank of Korea that virtual currencies pose a limited risk to the financial sector of the country comes in the same week that the Korean Financial Services Commission (FSC) announced that it is “not opposed” to cryptocurrencies. The FSC also reportedly intends to align itself with the G20’s vision of “unified,” regulations for cryptocurrency transactions.
Earlier in March, G20 summit proposed the drafting of regulatory guidelines and recommendations for digital currencies, while setting July as the deadline. The summit also called on the “international standard-setting bodies (SSBs)” to evaluate suitable “multilateral responses” that would later be recommended for “global implementation.”
Cryptocurrency: Here to Stay in South Korea
In recent times, several positive news on cryptocurrency has been forthcoming from the Korean government such as plans to lift the ban on domestic Initial Coin Offerings (ICOs), aligning itself with G20’s multilateral vision on digital currency regulations.
Also, some hospitals in the country now accept cryptocurrency as a means of payments for services they render. Last week, some ministries of the Korean government publicized a draft version of newly reviewed principles of the blockchain industry, while notably acknowledging cryptocurrency exchanges as regulated financial companies for the very first time.