The cryptocurrency portfolio of South Korean banks has a relatively low share in their total asset classes amounting to $1.79 billion (KRW 2 trillion) as at December 2017, data from the Bank of Korea (BOK) showed.
Korean banks indicate little interest in digital currency investments despite the spike in Bitcoin and cryptocurrency interest mainly in the last quarter of 2017. The BOK said that the total bank investments in digital assets amount to nearly 8% of the accumulated deposits operated by South Korean brokerage houses, which are worth $23.33 billion (KRW 26 trillion).
"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 BOK report said.
Bitcoin prices jumped to nearly $20,000 per unit in December last year from about $2,000 at the start of the year. The sharp rise in cryptocurrencies drew massive interest from investors that overheated the market.
To protect investors from possible fraudulent transaction and speculative deals, the South Korean government introduced several regulatory measures, including a personalised account system and banning minors from investing in digital assets, as well as initiatives to make the market more transparent and more controllable.
Regulators also mulled introducing tax measures on cryptocurrency trading through a sales tax or capital gains tax.
Last week, the South Korean government finally recognized the cryptocurrency industry by releasing a classification system for crypto and blockchain, while the Financial Services Commission (FSC) moved towards easing regulation on the industry.
The twin moves are in line with the policy of G20 member-countries to initiate a unified regulation on cryptocurrencies.
An unnamed FSC representative said:
“The FSC made revisions to its rules to apply strengthened policies in order to prevent or detect money laundering and illegal activities because the regulator isn't opposed to cryptocurrencies.”
The announcement came after the FSC said it would begin monitoring bank accounts used in cryptocurrency transaction particularly those involving foreign and local exchanges in a move to tighten control over digital currency exchanges operating in South Korea.
This article appeared first on Cryptovest