South Korea faces a dip in its in cryptocurrency market
Bank of Korea has recently mentioned that banks in South Korea are seeing a continuous dip in the investment of the country’s crypto assets. The statement came in from Korea’s Central Bank on Friday.
Yonhapnews, a leading Korean media company recently posted the news about the shallow market conditions in the country after the market soared up to $2 billion last year December.
"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 Bank of Korea’s report. "Against this backdrop, we expect crypto-assets to have a limited impact on the South Korean financial market."
What is the government doing?
The news about the prevailing dip surfaced along with the government's validation of the blockchain industry. According to the latest regulation, various blockchain businesses are classified and will need businesses to function with the state for the first time.
The government has introduced a range of measures to ensure the market stays transparent and governable. The measures include a real-name account system and prohibiting minors from making any investment, and is also accessing the taxation of cryptocurrencies.
Although the regulated South Korean banks own a mere eight percent of their assets in cryptocurrencies, the percentage is expanding as it is speculated to be an emerging asset class. Banks have agreed to take part in the market as they have some funds in virtual currencies. However, they are cautious about the number of cryptocurrencies emerging in the market, as an excessive rise might lead to a disruption in the country’s financial system. The interesting fact is, despite all these, regulated banks are the biggest shareholders in the country.
Image via Shutterstock
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