South Korea’s central bank has revealed that investments in crypto assets by local banks remained relatively low, despite the recent craze for the fledgling asset class, local news agency Yonhap has reported.
According to a Bank of Korea report, published on Friday outstanding balance of virtual accounts in local banks reached 2 trillion won ($1.79 billion) as of December. The central bank deemed the investment to be relatively mall, adding that it was equivalent to 8% total deposits operated by South Korean brokerage houses, which are worth 26 trillion won.
"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," said the BOK report, as quoted by Yonhap.
"Against this backdrop, we expect crypto-assets to have a limited impact on the South Korean financial market," it added.
Since the start of this year the South Korean authorities have been trying to rein in the digital currency sector in order to curb crypto-related fraudulent activities, money laundering and speculation. In order to achieve this, the country’s regulators have come up with a series of measures, including ending anonymous digital currency trading by ordering local crypto exchanges to implement a real-name trading account system.
Last week, it was reported that the South Korean government is working on new industry classification standards for the domestic blockchain sector. The scheme, whose final draft is reportedly being developed by the National Statistical Office, the Ministry of Science and Technology, and the Ministry of Information and Communication, would serve as a basis for policy making aimed at “blockchain promotion and regulatory frameworks”, local media outlet The BChain said in the initial report on the development. The draft also proposes a new definition for domestic crypto exchanges that “recognizes crypto exchanges as regulated financial institutions”, rather than “communication vendors”, as they are currently defined.