Despite South Korean banks’ reluctance to invest into crypto assets, they may still be the largest crypto holders in the country, the local media agency Yonhap reports. According to the analyzed Central Bank's report in the publication, the total amount of crypto South Korean banks had in their accounts as of December 2017, amounted to 2 trillion South Korean won ($1.79billion).
Why it is important
- Although there’s a growing interest in digital assets around the world, banks are not yet in a hurry to invest into crypto. In many countries, it is even prohibited by law. The amount in cryptocurrencies, as indicated in the report by the South Korea Central Bank is equivalent to eight percent of the total volume of deposits processed by brokerage firms, commercial banks are still the largest crypto holders in the country.
- Compared to other securities markets, the volume of investments in digital assets in South Korea is small, states the Central Bank of the country. At the same time, the regulator estimates possible risks for banks from crypto active assets as insignificant.
"Against this backdrop, we expect crypto-assets to have a limited impact on the South Korean financial market," note the analysts of South Korea's central bank .
Country’s commercial banks charge a commission for trading cryptocurrencies. In 2017, their income grew by 36 times just from these operations, with credit institutions earning about $2bn.
In June it was reported that authorities are planning to regulate crypto exchanges the same way as commercial banks. South Korea was set to tighten its control measures over the crypto market following a break into the Bithumb exchange. Recently it became known that the authorities of South Korea mitigated the rules of regulation of the cryptocurrency in accordance with the policies of the G20 countries. General rules within the G20 will be established within a month.
As reported earlier, South Korean authorities are planning to come up with the classification for blockchain-related projects and crypto exchanges, in the draft document unveiled by local media, cryptocurrency exchanges will be considered as an "Encrypted Asset Brokerage", while blockchain developers as a “blockchain-based software development and supply business”.